A Scan of Critical World Developments
Smart Money: Fossil Fuel Divestment Comes of Age
Fossil fuel divestment–the diversion of investments away from oil, gas, and coal companies— may be approaching a tipping point. Moral and financial arguments are coalescing as concern continues to grow about the risks of climate change. On the moral side, students have been demanding that their universities’ endowments be made compatible with their missions: to serve as “trustees of humanity’s capacities, values and understanding.” Over twenty colleges and universities from across the world have heeded these calls and taken steps to reduce their fossil fuel holdings. Financial arguments for divestment are gaining traction as well. A safe climate requires leaving most fossil fuel reserves in the ground, and since these assets may be “stranded” as the world responds to the threat climate change, they bear heightened risk for investors. Consequently, Norway’s state pension fund, the world’s largest at $850 billion in assets, recently decided to divest from coal and tar sands companies. These actions may be only the beginning, their power lying not in immediate financial impacts on fossil fuel companies, but in making a collective statement about the future we want.