Fossil Fuel Divestment Pledges Surpass $5 Trillion, Study Finds

The movement to divest from fossil fuels and invest in renewable energy has doubled in size since September 2015, to nearly $5.2 trillion in assets pledged, a new report from DivestInvest finds.

Based on research conducted by Arabella Advisors, the report, The Global Fossil Fuel Divestment and Clean Energy Investment Movement (37 pages, PDF), found that a total of 688 institutions and 58,399 individuals in seventy-six countries have pledged to divest from fossil fuel companies. Released on the one-year anniversary of the signing of the Paris climate change agreement, the report also found that the sectors that initially propelled the movement — educational institutions, faith-based organizations, and philanthropic foundations — continue to pledge in large numbers and now represent 54 percent of new divestment commitments made over the past fifteen months.

Increasingly, they are being joined by profit-driven institutions such as large pension funds, private insurers, and banks that, citing climate risks to their investment portfolios, have made divestment pledges totaling $4.5 trillion. According to the report, growing numbers of shareholders and regulators are insisting that companies disclose their exposure to climate risk, which in turn exposes fossil fuel companies to further divestment and legal action.

"The financial markets are fast losing faith in the investment case for fossil fuels," said Mark Campanale, founder and executive director of the Carbon Tracker Initiative. "A technological revolution is under way in the energy and transportation sectors, as cheap solar and electric cars take away demand for coal and oil. With a climate trifecta of physical risks, stranded assets, and the threat of legal liability — fiduciaries are now on notice to implement measures to protect their portfolios. Over time, climate risk management will likely become an enforceable obligation, as financial market regulators stand ready to move from rhetoric to tough action."

"As the hottest year in history comes to a close, the success of the global fossil fuel divestment movement is undeniable," said May Boeve, executive director of 350.org, a leader of the divestment movement. "What began on a few college campuses in the U.S. has spread to every corner of the world, squarely into the financial mainstream. Divestment has permeated every sector of society: from universities and pension funds, to philanthropic and cultural institutions, to cities, faith groups, insurance companies and more. Now at $5 trillion, the movement is unstoppable. Institutions and investors must choose whether to be on the right side of history."