Fossil fuel divestment is gaining traction; with 430 institutions and 2,040 individuals across 43 countries, representing USD $2.6 trillion in assets, committing to abandoning investments in fossil fuel companies.
A new report from Arabella Advisors states institutions and individuals that have pledged to both divest and invest in clean energy, such as wind and solar power, collectively hold $785 billion in assets.
Arabella Advisors says the divestment revolution is a result of growing recognition of the financial risks of investing in fossil fuels; an issue highlighted in a recent Citigroup analysis warning current target carbon emissions reductions could strand over $100 trillion of fossil fuel assets by 2050.
This is a view also recently shared by OECD Secretary-General Angel Gurría.
“Governments need to be seriously sceptical about whether new coal provides a good deal for their citizens,” he said in July.
In May last year, the Institute for Energy Economics and Financial Analysis (IEEFA) said international coal projects, including Australia’s Galilee Basin project, that rely on new export markets such as India were a huge financial risk.
Leading the divestment charge are pension funds (56%), followed by private companies (37%).
In Australia, ethical superannuation funds such as Future Super, the nation’s first fossil-fuel free fund, have enjoyed significant growth.
“Over the last few months we’ve seen other super funds in Australia begin down the path toward divestment,” says Future Super’s founder, Simon Sheikh . ” They’ve been joined by almost 100 other institutions in Australia, including the city of Newcastle, the government of the ACT and so many others. The pressure is working.”
High-profile individuals have used their celebrity to promote divestment; the latest being Leonardo DiCaprio.
Mr. DiCaprio and the Leonardo DiCaprio Foundation announced yesterday they were participating in the Divest-Invest pledge.
“Now is the time to divest and invest to let our world leaders know that we, as individuals and institutions, are taking action to address climate change, and we expect them to do their part this December in Paris at the U.N. climate talks,” said Mr. DiCaprio.
Divesting from fossil fuels and investing in clean energy has empowered thousands of institutions and individuals across the world to take direct action on climate says Arabella Advisors.
“The rapid growth of the movement indicates the urgency many feel to hasten a transition toward a clean energy economy and, based on growth trends over the past two years, momentum will likely continue to build regardless of the outcome of the Paris negotiations.”
Measuring The Growth Of The Divestment Movement can be viewed here (PDF).
