The Logic of Divestment: Why We Have to Kiss Off Big Carbon Now
If many institutional investors remain skeptical of its efficacy, the divestment movement itself keeps racking up victories. “This snowball is rolling downhill,” Dorsey says. In October, the University of Glasgow became the first school in the European Union to commit to purge its endowment of fossil-fuel investments. Down Under, the Australian National University announced it would unwind investments in seven resource and mining firms – striking a nerve in a nation that ranks second in the world in coal exports, and leading hard-right Prime Minister Tony Abbott, who pines for Australia to become “an affordable energy superpower,” to call the decision “stupid.”
Divestment is increasingly being taken up by religious groups around the world – in September, the Church of Sweden announced it had purged its $830 million portfolio of fossil fuels. Cities on the front lines of climate change are also purging their investment funds – including Seattle and Oakland.
Slowly, the wheels of our political systems are also beginning to move. In July, the World Bank, responding to pressure from climate activists, announced that it would largely stop financing coal-fired power plants. In December, the pro-tem leader of the California State Senate proposed legislation that would force the state’s massive public retirement funds – with more than $400 billion in assets – to divest from coal. And in his January inaugural address, California Gov. Jerry Brown called for his state – already a leader in wind and solar – to get half of its electricity from renewables by 2030.
Drawing particular scorn from Exxon Mobil, the U.N.’s special envoy for climate change endorsed the tactic of divestment last July. “We can no longer invest in companies that are part of the problem of the climate shocks that we’re suffering from,” said Mary Robinson, formerly the president of Ireland. And in perhaps the most radical word uttered in his presidency, even Barack Obama has given voice to the movement, exhorting activists in a 2013 climate speech delivered at Georgetown University to “divest.”
Ultimately, argues John D. Rockefeller’s great-granddaughter, the tipping point will come when mounting losses awaken investors to the false security of fossil-fuel investments and they begin to embrace the upside of a clean-energy future.
“If you look back,” says Valerie Rockefeller Wayne, “when John D. Rockefeller Sr. got into the business, we got our oil from whales. It’s preposterous, right? His big breakthrough was to get oil out of the ground. The breakthrough now is going to be in clean energy. You should be there at the forefront. Those are the investors who are going to make the most money.”