What is Divestment?
Divestment is the opposite of investment. It is the removal of money from an industry, whether for ethical or financial reasons.
The fossil fuel divestment movement is calling on universities, municipalities, public good institutions, philanthropic organizations, and individuals to divest their financial holdings from the fossil fuel industry. The movement is based on 2 very basic facts:
1) Fossil fuel corporations have 5x more known oil, coal, and gas reserves than climate scientists have determined we can burn and still have a 50% chance of avoiding catastrophic climate change.*
2) Fossil fuel corporations continue to spend 100s of billions of dollars every year looking for more oil, more gas, and more coal.**
In essence, fossil fuel companies have become rogue actors; their profits depend on radical climate destabilization.
It is because of this that many people have concluded that just as it is immoral to gain from tobacco companies (whose profits depend on harming human health) so too it is immoral to gain from fossil fuel companies, whose profits require grievous harm to every person (and ecosystem) alive.
Therefore the correct moral action is to divest from such companies.
Here is a fuller explanation of the reasoning behind the fossil fuel divestment movement
Divestment: A History
“People of conscience need to break their ties with the corporations financing the injustice of climate change”
Archbishop Desmond Tutu
There have been several successful divestment campaigns over the past few decades.
Just last year, the Gates Foundation divested from the British security firm G4S after a divestment campaign highlighted the egregious role they were playing in the Israel-Palestine conflict.
Two other recent divestment campaigns focused on the tobacco industry and on entities funding genocide in Darfur. Indeed, in the book This Changes Everything, Naomi Klein credits the tobacco divestment movement with playing a significant role in creating an atmosphere that allowed the passage of legislation limiting the ability of tobacco firms to lobby politicians and to advertise.
But history's most powerful divestment movement, of course, was from companies doing business in Apartheid-era South Africa. By the mid-1980s, 26 state governments, 22 counties, 90 cities and 155 U.S campuses had divested. That campaign has been widely credited with helping to break the back of the Apartheid government and usher in an era of democracy and equality, including by Archbishop Desmond Tutu, who has also written passionately in support of fossil fuel divestment: “During the anti-apartheid struggle in South Africa, using boycotts, divestment and sanctions, and supported by our friends oversees, we were not only able to apply economic pressure on the unjust state, but also serious moral pressure.”
** It has been estimated that 1% of global GDP is currently being expended on searching out more fossil fuel reserves, including in high risk areas such as the Arctic. Ironically, 1% of global GDP is also a figure that has been touted by the International Energy Agency as being the sum required to transition our planet to a green economy that would keep us below catastrophic levels of warming.