What is Fossil Fuel Divestment?
Divestment is the opposite of investment. It means to pull invested money out of companies like Shell, ExxonMobil, and Chevron. These companies profit by exploiting natural resources and selling products that accelerate climate change. If we agree that climate change is doing harm all around the world, then it’s wrong for us to profit off companies that continue to expand the fossil fuel economy. The divestment movement calls for the simple action of removing yourself as a shareholder in fossil fuel companies.
Why is this relevant for NAU?
Many amazing individuals and initiatives here at NAU are funded by our endowment. The endowment is a pool of money worth around $200 million, which is largely invested in the stock market. This money is spread across a wide variety of companies and industries – including the fossil fuel industry. What this means is that some of the financial resources made available through our endowment can be traced back to the profits of the fossil fuel industry. Here at NAU, we have a mission and vision tied to sustainability and a renewable energy future. We believe that our position as a shareholder in the fossil fuel industry is incompatible with our commitment to be proactive on climate change. What else besides divestment is NAU already doing to lower its fossil fuel emissions?
Who is Divesting?
Thousands of institutions around the world, with portfolios worth over $40 trillion, have divested from fossil fuels. These include pension funds, corporations, faith-based organizations, and higher education. Many major universities, including the entire University of California system, Stanford, and Harvard, have divested from fossil fuels. The fossil fuel divestment movement has accelerated in recent years as the impact of climate change intensifies and the inaction from oil, gas, and coal companies becomes more apparent. There are now institutions across 71 counties that have committed to fossil fuel divestment. Visit this database to see the full list of colleges, universities, and other institutions that have already divested from fossil fuels.
But I Thought Major Energy Companies Were Helping?
The oil & gas industry wants us to think they are part of the solution. Shell, Chevron, BP, ExxonMobile, and other oil & gas companies are engaged in very effective public relations strategies to persuade the public that they are leaders in the renewable energy transition. However it’s very clear that the oil & gas industry is planning for a future of fossil fuels – not renewables. Every major oil & gas company today spends far more on fossil fuel exploration than renewable energy development. The world has enough proven reserves of coal, oil, and gas to last beyond 2050 at current rates of consumption. Most of these reserves will have to be left in the ground if we hope to prevent runaway climate change. Major oil & gas companies are not part of the solution while they continue to expand their fossil fuel business.
How Does Divestment Make a Difference?
Many argue that divestment makes no difference because someone else is just going to buy the shares that you sell. However, this perspective ignores three key outcomes that result from fossil fuel divestment:
-
Improve risk management. Climate change poses real and significant risks to investments. Investment in the oil & gas industry is risky due to the fact that their business model relies on the fossil fuel economy. As renewables become more dominant in the future, the oil & gas industry is at risk of becoming obsolete.
-
Alignment with values. Many companies and institutions have pledged to achieve net zero emissions at some point in the next few decades. These commitments are incompatible with investments in the oil & gas industry. Divestment from fossil fuels is about aligning climate commitments with climate action. Divestment is climate action!
-
Expand political & social pressure on the fossil fuel industry. As the divestment movement grows, so does the social and political pressure on the fossil fuel industry. The fossil fuel business model must end in order to make meaningful progress towards global GHG emissions reduction. There are powerful, entrenched interests working around the clock to keep the fossil fuel economy going. Divestment is an act of resistance against these interests.
What can I do?
Sign our letter and ask that the NAU Foundation take divestment seriously!
What are FFNAU’s specific demands?
Check out exactly what we are asking the NAU Foundation Board to do here.