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Today's Top News
To Break Fossil Fuel Industry's Grip, Foundations Divest Nearly $2 Billion
'Either coal, oil and gas deposits become stranded assets, or we do,' says one coalition member advisor
Seventeen philanthropic foundations controlling nearly $2 billion in assets on Thursday put their money where their ethics are, announcing they will be divesting all their holdings in the fossil fuel industry and reinvesting in the clean energy sector.
Organized as the Divest-Invest initiative, the coalition said they could no longer stay invested in the fossil fuel economy "when the climate science is clear that the window to preserve a livable climate is closing fast." In addition to their own divestment, the foundations urged other philanthropic groups to do the same.
"Climate change affects the mission of all foundations—whether focused on environment or not," said Ellen Dorsey, Executive Director of the Wallace Global Fund and the originator of the Divest-Invest initiative. “Starting today, we pledge to use all our assets -- not just the usual five percent yearly payment of grants—to advance our goals, values and beliefs.”
The move was quickly welcomed by campaigners at Go Fossil Free, a project of 350.org and leaders of the national fossil fuel divestment campaign:
And 350.org co-founder Bill McKibben met the announcement with the following statement: "Given the ongoing failure of governments and business to lead in the epic fight against climate change, we need our most prominent institutions to take a powerful, moral and practical lead. Here's a great example of just that kind of leadership."
“The financial risks of staying invested in fossil fuels are high because two-thirds of proven fossil fuel reserves simply cannot be burned, yet the markets treat this basic physics like it is science fiction. Either coal, oil and gas deposits become stranded assets, or we do." —Tom Van Dyck
Leaders of the various foundations were clear about the ethical, environmental, and financial implications of their decision.
“The financial risks of staying invested in fossil fuels are high because two-thirds of proven fossil fuel reserves simply cannot be burned, yet the markets treat this basic physics like it is science fiction,” said Tom Van Dyck, Financial Adviser at RBC Wealth Management. "Either coal, oil and gas deposits become stranded assets, or we do."
Tom Van Dyck, a financial adviser for RBC Wealth Management, said: “The financial risks of staying invested in fossil fuels are high because two-thirds of proven fossil fuel reserves simply cannot be burned, yet the markets treat this basic physics like it is science fiction. Either coal, oil and gas deposits become stranded assets, or we do."
Finally, in an op-ed published separately on Thursday, Dorsey—along with her Wallace Fund colleague Richard Mott—explain how the potential impact of the divestment movement they have now joined goes beyond the obvious financial impacts. They write:
By building a movement that defines the fossil fuel industry as a moral pariah, Divest-Invest seeks to break the industry's grip on our political process and help catalyze the global energy transition that the climate crisis demands.
Fossil divestment has never been primarily about the act of divesting itself, or even about doing direct economic harm to the fossil fuel industry. Instead, it uses divestment as a tool to confront the corporate powers that have taken our political system hostage.
To this end, the moral power of the Apartheid-era framing has been enormous. It has mobilized broad sectors of society around the ethical aspects of climate change. Faith groups, universities, and hospitals are now sending a clear message of conscience that holding fossil energy stock is no longer acceptable.
The movement has also galvanized economic self-interest. Its focus on the fossil fuel industry's financial Achilles' heel--the risk that fossil fuel stocks may be massively overvalued--has already altered the investment community's thinking.
And, in conclusion, they add:
We must not forget our unique moment in history. Who in our community who could proudly defend, today, a decision not to have divested from South Africa 30 years ago? In hindsight, the moral case seems too clear. How then might we envision defending, 20 years from now, keeping our millions invested in business-as-usual fossil energy, at precisely the moment scientists are telling us there is no time left to lose? The threat of runaway change is too imminent to delay the kind of energy transition that Divest-Invest demands.
The foundations that have come forward this week in launching "Divest-Invest: Philanthropy" believe the clear answer is that we must act now. Students and faith groups are once again lighting the way. Let's join them and rise to meet the climate challenge while there is time.