Since 2012, the fossil fuel divestment movement has expanded beyond college campuses in the United States and United Kingdom to include 688 institutions, in 76 countries, and 58,399 individual investors, with commitments totally more than $5 trillion dollars. In an article published in June by the Oxford Research Encyclopedia of Climate Science, along with Luis Hestres of the University of Texas at San Antonio, I examine the origins, growth and arguments for and against divestment from the fossil fuel industry.
The article is the ORE Climate Science featured article for the month of July. In December it will appear in print in the new Oxford Encyclopedia of Climate Change Communication, edited by Matthew Nisbet of Northeastern University. As Nisbet writes:
“Until now, however, there has not existed a leading scholarly outlet where the broad range of climate change communication, media and public opinion research is reviewed, synthesized, and critiqued; or translated in relation to other disciplines and professions. To address this gap, the Oxford Encyclopedia of Climate Change Communication is a curated series of 115 original peer-reviewed articles published in print and digital format, and by way of the web-based Oxford Research Encyclopedia (ORE) Climate Science. The collected articles comprehensively review research on climate change communication, advocacy, media and cultural portrayals, and their relationship to societal decisions, public knowledge, perceptions, and behavior. Co-authored by more than 250 experts representing more than a dozen disciplines and twenty countries.”
“Divestment is a socially responsible investing tactic to remove assets from a sector or industry based on moral objections to its business practices. It has historical roots in the anti-apartheid movement in South Africa. The early-21st-century fossil fuel divestment movement began with climate activist and 350.org co-founder Bill McKibben’s Rolling Stone article, ‘Global Warming’s Terrifying New Math.’ McKibben’s argument centers on three numbers. The first is 2°C, the international target for limiting global warming that was agreed upon at the United Nations Framework Convention on Climate Change 2009 Copenhagen conference of parties (COP). The second is 565 Gigatons, the estimated upper limit of carbon dioxide that the world population can put into the atmosphere and reasonably expect to stay below 2°C. The third number is 2,795 Gigatons, which is the amount of proven fossil fuel reserves. That the amount of proven reserves is five times that which is allowable within the 2°C limit forms the basis for calls to divest.
The aggregation of individual divestment campaigns constitutes a movement with shared goals. Divestment can also function as “tactic” to indirectly apply pressure to targets of a movement, such as in the case of the movement to stop the Dakota Access Pipeline in the United States. Since 2012, the fossil fuel divestment movement has been gaining traction, first in the United States and United Kingdom, with student-led organizing focused on pressuring universities to divest endowment assets on moral grounds.
In partnership with 350.org, the Guardian launched its Keep it in the Ground campaign in March 2015 at the behest of outgoing editor-in-chief Alan Rusbridger. Within its first year, the digital campaign garnered support from more than a quarter-million online petitioners and won a “campaign of the year” award in the Press Gazette’s British Journalism Awards. Since the launch of the Guardian’s campaign, “keep it in the ground” has become a dominant frame used by fossil fuel divestment activists.
Divestment campaigns seek to stigmatize the fossil fuel industry. The rationale for divestment rests on the idea that fossil fuel companies are financially valued based on their resource reserves and will not be able to extract these reserves with a 2°C or lower climate target. Thus, their valuation will be reduced and the financial holdings become ‘stranded assets.’ Critics of divestment have cited the costs and risks to institutional endowments that divestment would entail, arguing that to divest would go against their fiduciary responsibility. Critics have also argued that divesting from fossil fuel assets would have little or no impact on the industry. Some higher education institutions, including Princeton and Harvard, have objected to divestment as a politicization of their endowments. Divestment advocates have responded to this concern by pointing out that not divesting is not a politically neutral act—it is, in fact, choosing the side of fossil fuel corporations.”