Will it make a difference?
Divestment is an incredibly powerful tool to drive political reform, rather than a means to achieve short-term financial losses to the fossil fuel industry. The fossil fuel industry has a stranglehold over our political system, with industry players doing everything they can to stop legislation that seeks to limit emissions. When institutions like universities, councils and churches divest from fossil fuels, they weaken the fossil fuel industry’s social license to pollute the planet for free, which in turn helps free up political space for more ambitious emissions reduction legislation.
A 2013 study conducted by Oxford University’s Smith School found that historically, divestment campaigns targeting industries like tobacco and armaments have been successful in achieving stigmatisation and consequently, stricter regulation of these industries.[3] By stigmatizing the fossil fuel industry, the divestment movement aims to reign in its political influence and stimulate legislation that is in line with the climate science.
What are we calling for?
1. Cease any new investment in fossil fuel companies;
2. Divest from direct ownership in and any managed funds that include holdings in fossil fuel companies within 5 years;’
3. Public disclosure of progress towards this.
Which companies?
Two hundred publicly-traded companies hold enough carbon to tip us over the 2 degree threshold by 2050. [4] Since 2001, they have amassed over $1 trillion in profit. [5] Many of these companies, incidentally, are also the largest contributors to politicians globally. Many influence legislation, fund deniers and receive billions of dollars in government handouts each year. [6] These are the companies we’re calling for divestment from.
What’s involved?
The divestment process will depend on the specifics of your institution’s investments, however some guiding points are as follows:
1. Identify where your investments are exposed to the fossil fuel industry.
Work with your fund managers to identify the most fossil fuel exposed companies in your portfolio. A list of companies that are divestment candidates can be found at:
• Australian Companies: Carbon Proofing Your Investments: Moving Funds Out of F•IonstseirlnFauteiolsna[l28]Companies: The Carbon Underground – the World’s Top 200 Public Companies ranked by the Carbon Content of the Fossil Fuel Reserves [29]
If you are interested in going further and moving your money away from banks that lend to fossil fuels, Market Forces has developed a table which identifies which Australian banks do and don’t lend to fossil fuels.[30]
2. Build support for a divestment commitment
Work with your colleagues and the public to build internal and external support.
What’s involved? cont’d
•a process for measuring the fossil fuel
3. Meet with your financial advisors and/or fund managers
Talk them through what you want to do and why. Remember that they’re answerable to your institution as the client. Build their willingness to help you; get them to help you identify where your institution is exposed to fossil fuels and develop a process for screening fossil fuel companies from your portfolio.
4. Craft legislation or policy to freeze all new investment in fossil fuel companies and scale back existing holdings
Where your institution doesn’t have direct control over the funds in question (e.g. superannuation liabilities), work with or call on the governing bodies of the funds to do so. In some cases, especially where cities or local councils are involved, funds may be part of larger state investment pools, in which case state action will be needed. In the event that your institution has no fossil fuel investments (highly unlikely if you have managed funds), a public resolution indicating the institution’s intent not to invest in fossil fuels now or in the future sends a powerful message.
5. Develop a reporting framework
Work with the relevant authorities in your institution and, where necessary, external advisors, to establish a timetable and process for implementing your resolution. This should include:
e•xrepgousularre pouf byoliucrpirnovgersetmssernetpsoarntsd, including a statement of progress in your annual report.
6. Consider investing the funds in more positive ways
Ask your fund manager(s) to prepare a report and options for investing the divested funds in a way that further maximizes the positive impact of the funds by seeking out investment opportunities that limit the effects of burning fossil fuels or help to mitigate their effects. This could include, but is not limited to, clean technology, renewable energy, sustainable companies or projects, and sustainable communities.
As more institutions join the divestment movement, the extent of sustainable re- investmentoptions and advice willgrow, making divestment an increasingly straightforward process.