In the run-up to the recent UN Climate Summit, the idea of personal divestment from fossil fuels went from virtually total obscurity to receiving some coverage in the popular press. Unfortunately, many of the stories and blog posts missed key points — and others demonstrated muddled thinking and misleading conclusions including the idea that divestors will lose out financially (more on this in future posts).
In talking about the emerging discussion of personal divestment, an obvious place to start is the simple question: “Why should I make the effort to divest from fossil fuels?”
Here are four good reasons:
- Divestment means not benefiting from the damage being caused by the fossil fuel industry. Every dollar earned from an investment in the fossil fuel industry represents a benefit derived from the continued growth of an industry that is the core driver of global warming and of growing hardship across the planet. Fossil fuels are also a focal point of on-going conflicts and wars – carrying with them vast loss of life and displacing families by the hundreds of thousands. (Coverage of the latest Pentagon assessment.)
- Divestment sends a clear, unequivocal message. This is about numbers – not in dollars – but in people. If millions of people remove their financial interest in fossil fuel companies, that will send a very clear and very powerful message to governments, legislators, institutional investors, and the global business community. It will also signal a demand for change in other pivotal parts of the economy where consumption of fossil fuels can be reduced through innovation – enabling new ways to generate energy and improving the energy efficiency of the things people use every day.
- Divestment is a reminder. The more that each of us pays attention to all the ways in which energy plays into our lives (including our investments), the more likely we will move ourselves and our families toward generating and consuming energy in a sustainable and socially responsible way.
- Divestment provides reinvestment opportunities. The clean energy economy is growing, and that growth is going to accelerate. New companies are being created every day, and established companies are quickly moving to create new products – including things like home energy networks, advanced energy storage systems, and smart efficient vehicles. That innovation will continue to ramp up, and it will last for decades. Whether your investment style is aggressive and “growth” oriented, or conservative and “income” oriented, the emerging new energy economy provides compelling reinvestment opportunities.
Whether these ideas, or others put forward by other divestment proponents, resonate for you, the most important thing is to realize that what you do with your money matters. It matters a lot.
If you’re not yet a divestor, ignore the noise – the science is telling us that there is absolutely no time to waste.