I spend a lot of time talking to people about divesting from fossil fuels – family members, friends, people at meetings and seminars – and the occasional random person who makes the mistake of asking what I do. Most of these people are really concerned about climate change. Its inspiring to hear that many have taken steps to reduce their carbon footprints. But, only a few people bring up that they’ve divested their investments from fossil fuels.
One problem is that the idea is only a couple of years old. Whether you have a few bucks tucked away for retirement or you’re a Shark Tank gazillionaire, there’s a 99% chance that your investments didn’t come to mind when you first started wondering about things you might do to help slow down global warming.
If you have heard about divestment, there’s also a 99% chance you heard that divestment flies in the face of conventional “wisdom” when it comes to investing. The pivotal barrier is the idea that there are supposedly only a few reinvestment options that are fossil fuel free. And, by extension, that means that divesting is a financially risky thing to do. Here again, one problem is that the idea is new and any information hasn’t penetrated very far. The second problem is that, to the degree that there is discussion of divestment, much of the thinking is muddled or just plain wrong. Kind of like listening to Donald Trump talking about – well – just about anything.
A new website from the non-profit As You Sow will be a potent weapon in knocking this barrier down. Why? Because, in a few seconds, you can check to see if a mutual fund has investments in the fossil fuel industry or not.
The goal of the divestment movement is to pull support away from the major fossil fuel companies and shine a big bright light on the nonexistent (or, depending on the country, woefully ineffective or just stupid) policy response to climate change. The tool’s “Carbon Underground 200” screening option allows you to see if your fund holds stock in the companies at global warming’s ground zero. The website also instantly lets people see that many diversified small-cap funds, many sector funds, and a whole bunch of other funds don’t hold these stocks. Depending on how far future improvements go, the site will also eventually demonstrate that small and mid-cap exchange traded funds (ETFs) and many other mutual funds are inherently fossil fuel free.
Fund holdings information has always been publicly available, but few people are geeky enough to hunt for it. (Guilty as charged.) In the long run, the game changer here is that this tool completely blows up the notion that if you want to divest, you only have a few options. That includes many funds already available in company 401k plans.
Its important to point out that a leading group of forward-thinking investment companies were way ahead of the curve and created funds that are fully fossil fuel free by design, As divestment grows in popularity, the website will help get the word out about these funds, too.
What’s new here is that this tool makes it clear that the set of fossil free investment options is big. Very big. And, that will draw a lot more people to the idea. The power of personal divestment is in the number of people who take the leap. For this side of the divestment movement to make a difference, we need people to divest and we need them ASAP.
Andy Behar and the smart, inspired people of As You Sow (and their partners) have just fired off the 21st century “click heard ’round the world.” Thank you folks – nicely done. (Wouldn’t it be great to see Steven Colbert, Bill McKibben and Andy checking out the site….Steven – you there?)