Jenna Nicholas, Rocky Mountain Institute :
Last September, a day after 400,000 people marched for the climate in the streets of New York City, the Rockefeller Brothers Fund made headlines, announcing it would ensure none of the fund’s $860 million would be invested in fossil-fuel companies. In January 2014, a group of 17 foundations preceded the Fund, committing to divest $1.7 billion, which has grown to over 100 foundations and over $5 billion in pledges over the past 18 months. In early June 2015, the Norwegian government committed to divesting 100 percent of its coal holdings from its sovereign wealth fund-the largest in the world with $900 billion in assets. In total, hundreds of billions of dollars have been pledged for divestment, including from individuals, universities, sovereign wealth funds, faith-based groups, and pension funds-forming an accelerating movement that spans sectors.
Fossil fuels play an important role in our current global energy mix. However, transitioning from fossil fuels is critical since we cannot burn more than roughly 20 percent of the current proven oil, coal, and gas reserves if we want to stay on a 2 degrees Celsius track. Divestment can help realize this goal in three ways:
First, reduced investor interest may eventually raise the cost of capital for the fossil-fuel industry and lessen its ability to pursue certain marginal projects. Second, when investors sell their investments in fossil-fuel companies, they send a signal that business as usual is no longer acceptable. Third, and perhaps most importantly, if divested money is invested in new energy solutions, such as renewable energy and energy efficiency, an alternative future is made possible. Divestment can be part of a comprehensive transition to a cleaner energy economy. But if billions of dollars are divested from fossil-fuel companies, where should the money flow to make the biggest impact?
In 2013, renewable generation and energy efficiency attracted more than half a trillion dollars of investment worldwide. The money committed to divestment is of the same order of magnitude, meaning it can have a large impact on the investment landscape. Last September, a day after 400,000 people marched for the climate in the streets of New York City, the Rockefeller Brothers Fund made headlines, announcing it would ensure none of the fund’s $860 million would be invested in fossil-fuel companies. In January 2014, a group of 17 foundations preceded the Fund, committing to divest $1.7 billion, which has grown to over 100 foundations and over $5 billion in pledges over the past 18 months. In early June 2015, the Norwegian government committed to divesting 100 percent of its coal holdings from its sovereign wealth fund-the largest in the world with $900 billion in assets. In total, hundreds of billions of dollars have been pledged for divestment, including from individuals, universities, sovereign wealth funds, faith-based groups, and pension funds-forming an accelerating movement that spans sectors.
Fossil fuels play an important role in our current global energy mix. However, transitioning from fossil fuels is critical since we cannot burn more than roughly 20 percent of the current proven oil, coal, and gas reserves if we want to stay on a 2 degrees Celsius track. Divestment can help realize this goal in three ways:
First, reduced investor interest may eventually raise the cost of capital for the fossil-fuel industry and lessen its ability to pursue certain marginal projects. Second, when investors sell their investments in fossil-fuel companies, they send a signal that business as usual is no longer acceptable. Third, and perhaps most importantly, if divested money is invested in new energy solutions, such as renewable energy and energy efficiency, an alternative future is made possible. Divestment can be part of a comprehensive transition to a cleaner energy economy. But if billions of dollars are divested from fossil-fuel companies, where should the money flow to make the biggest impact?
In 2013, renewable generation and energy efficiency attracted more than half a trillion dollars of investment worldwide. The money committed to divestment is of the same order of magnitude, meaning it can have a large impact on the investment landscape. What are the areas where investments could yield good returns and accelerate the shift to a clean energy system?
Renewable electricity generation-wind, solar, hydro, and biomass-has many benefits.
(To be continued)
Last September, a day after 400,000 people marched for the climate in the streets of New York City, the Rockefeller Brothers Fund made headlines, announcing it would ensure none of the fund’s $860 million would be invested in fossil-fuel companies. In January 2014, a group of 17 foundations preceded the Fund, committing to divest $1.7 billion, which has grown to over 100 foundations and over $5 billion in pledges over the past 18 months. In early June 2015, the Norwegian government committed to divesting 100 percent of its coal holdings from its sovereign wealth fund-the largest in the world with $900 billion in assets. In total, hundreds of billions of dollars have been pledged for divestment, including from individuals, universities, sovereign wealth funds, faith-based groups, and pension funds-forming an accelerating movement that spans sectors.
Fossil fuels play an important role in our current global energy mix. However, transitioning from fossil fuels is critical since we cannot burn more than roughly 20 percent of the current proven oil, coal, and gas reserves if we want to stay on a 2 degrees Celsius track. Divestment can help realize this goal in three ways:
First, reduced investor interest may eventually raise the cost of capital for the fossil-fuel industry and lessen its ability to pursue certain marginal projects. Second, when investors sell their investments in fossil-fuel companies, they send a signal that business as usual is no longer acceptable. Third, and perhaps most importantly, if divested money is invested in new energy solutions, such as renewable energy and energy efficiency, an alternative future is made possible. Divestment can be part of a comprehensive transition to a cleaner energy economy. But if billions of dollars are divested from fossil-fuel companies, where should the money flow to make the biggest impact?
In 2013, renewable generation and energy efficiency attracted more than half a trillion dollars of investment worldwide. The money committed to divestment is of the same order of magnitude, meaning it can have a large impact on the investment landscape. Last September, a day after 400,000 people marched for the climate in the streets of New York City, the Rockefeller Brothers Fund made headlines, announcing it would ensure none of the fund’s $860 million would be invested in fossil-fuel companies. In January 2014, a group of 17 foundations preceded the Fund, committing to divest $1.7 billion, which has grown to over 100 foundations and over $5 billion in pledges over the past 18 months. In early June 2015, the Norwegian government committed to divesting 100 percent of its coal holdings from its sovereign wealth fund-the largest in the world with $900 billion in assets. In total, hundreds of billions of dollars have been pledged for divestment, including from individuals, universities, sovereign wealth funds, faith-based groups, and pension funds-forming an accelerating movement that spans sectors.
Fossil fuels play an important role in our current global energy mix. However, transitioning from fossil fuels is critical since we cannot burn more than roughly 20 percent of the current proven oil, coal, and gas reserves if we want to stay on a 2 degrees Celsius track. Divestment can help realize this goal in three ways:
First, reduced investor interest may eventually raise the cost of capital for the fossil-fuel industry and lessen its ability to pursue certain marginal projects. Second, when investors sell their investments in fossil-fuel companies, they send a signal that business as usual is no longer acceptable. Third, and perhaps most importantly, if divested money is invested in new energy solutions, such as renewable energy and energy efficiency, an alternative future is made possible. Divestment can be part of a comprehensive transition to a cleaner energy economy. But if billions of dollars are divested from fossil-fuel companies, where should the money flow to make the biggest impact?
In 2013, renewable generation and energy efficiency attracted more than half a trillion dollars of investment worldwide. The money committed to divestment is of the same order of magnitude, meaning it can have a large impact on the investment landscape. What are the areas where investments could yield good returns and accelerate the shift to a clean energy system?
Renewable electricity generation-wind, solar, hydro, and biomass-has many benefits.
(To be continued)
