Cut off the social license and financing for fossil fuels — divest, desponsor, defund.
Fossil fuel companies are the wealthiest and most powerful companies on the planet, and they’re using their money to block every serious attempt to stop climate change. By convincing our institutions to divest, desponsor and defund fossil fuels, we can turn the tide of public opinion against them.
Divest from fossil fuel companies.
Divestment holds the fossil fuel industry responsible for its culpability in the climate crisis. By shifting public support and our money away from the fossil fuel industry, we can break the hold that they have on our economy and our governments, while making way for a just transition to renewable energy.
Campaigns aren’t just about winning a “yes” on divestment. They’re about telling the story of people power against the fossil fuel industry. Getting a “yes” on divestment is a big part of that, but creating tension around a city pension system that might be reluctant to divest tells that story, too.
By dismantling the fossil fuel industry’s social license, we can break the hold it has over our economy and governments, make way for community-led solutions to the crisis, achieve strong climate legislation, and shift the paradigm of fossil fuel dependency.
Financing any new fossil fuel project, anywhere, is unacceptable due to the dangers fossil fuels pose to society and our planet. Local campaigns are pushing their cities and towns to stop using the banks backing fossil fuel development. It’s time for banks to stop the lines of credit and project-level loans to fossil fuel infrastructure like new pipelines or fracking drill rigs.
Our cities and towns need to take control of their funds and make sure that not one penny more is directly or indirectly funding climate change.
We can shift public support away from the fossil fuel industry by breaking the sponsorship ties many fossil fuel companies have with our public institutions.
We don’t want BP, Exxon, Adani or any other fossil fuel company associated with our museums, cultural institutions, sports teams, or public events. These are the companies with business plans that would drive climate change into an uninhabitable world. Let’s push our organisations and institutions to reject these sponsorships and take a stronger moral stand for the public good.
The City of Cape Town formally announced its intent to divest from fossil fuel assets in June 2017 – which makes Cape Town the first city in South Africa and the global south to commit to divestment from fossil fuel holdings. Learn how Cape Town activists did it
Photo: 350 Africa
Frequently Asked Questions
What are we asking for, and who are we asking?
Divest: We want institutional investors, our town, city or state pensions and other public funds, to immediately freeze any new investment in fossil fuel companies, and divest from direct ownership and any commingled funds across all asset classes including fossil fuel public equities and corporate bonds within 5 years.
We do recommend a complete exclusion of ALL fossil fuel investment. However, we acknowledge that it might be difficult to identify the entire fossil fuel chain and therefore we suggest using the 200 publicly-traded companies list. This list include the vast majority of traded coal, oil, and gas companies and ranks them by their amount of reserves.
Defund: We want institutional leaders, like our elected officials, to make sure public money isn’t being used to support the fossil fuel industry. That includes cutting ties with the banks that are funding the climate crisis and building new fossil fuel projects. We call on our institutional leaders to commit to banking fossil free.
Here are a few resolutions passed at city councils:
DeSponsor: As they say over at BP or Not BP, “to thine own self be true, Be nothing if not critical and forgo your damaging relationship with BP.” We call on our cultural and public institutions, our sports teams and major events to cut ties with the industry and reject any public partnership with coal, oil and gas. We don’t want their logos attached to our good name. They can’t fool us any longer. Cut all sponsorships immediately.
If you are already part of an existing group active on similar issues, host a meeting to discuss what a local campaign to call for Not a Penny More could focus on in your local area. Don’t forget to register your campaign on the Fossil Free map.
Companies like ExxonMobil, Shell, BP have billions of dollars/euros. How can divesting the funds from a few institutions like universities, pensions and faith groups make an impact?
Divestment isn’t primarily an economic strategy, but a social and political one. Just like in the struggle for Civil Rights in the U.S. or the fight to end Apartheid in South Africa, the more we can make climate change a deeply moral issue, the more we will push society towards action. We need to make it clear that if it’s wrong to wreck the planet, then it’s also wrong to profit from that wreckage. At the same time, divestment builds political power by forcing our nation’s most prominent institutions and individuals to choose which side of the issue they’re on. Divestment sparks a big discussion and – as we’re already seeing in this campaign – gets prominent media attention, moving the case for action forward.
At the same time, there are certain economic impacts. Having hundreds of institutions that collectively hold more than $6 trillion of assets committed to divest already causes problems to coal companies. Add in the big global pension funds and church, synagogue, and mosque investments, and we’re well on our way to making the likes of ExxonMobil, Shell, and Peabody sweat.
While sale of stock might not have an immediate impact on a fossil fuel company, especially one as gigantic as Exxon, what it does do is start to sow uncertainty about the viability of the fossil fuel industry’s business model. Here’s why: in order to keep warming below 2°C, a target almost all the countries on Earth has agreed to, the International Energy Agency calculates that the fossil fuel industry will need to leave approximately 90% of their reserves of coal, oil, and gas unburned. Those reserves may be below ground physically, but they’re already above ground economically and factored into the share price of every fossil fuel company. Globally, the value of those reserves is around $20 trillion, money that will have to be written off when governments are finally forced to regulate carbon dioxide as a pollutant. By divesting from fossil fuels, institutions not only build the case for government action, they also start this important discussion about the fossil fuel industry’s “stranded assets.”
On the flip side of that coin, divestment also starts to build momentum for moving money into clean energy, community development, and other sustainable investments. Even a fraction of those investments moving toward new investments like solar bonds, revolving loan funds, and advanced energy industries will create a huge impact . More importantly, when other investors, be they individuals or pension funds, see world-leading institutions begin to move in this direction, they’re more likely to follow suit. Institutions’ investments won’t be enough to fuel a clean energy revolution – that’s why we’re pushing for action to stop + ban fossil fuels and to accelerate a just transition to renewable energy too – but they build the case for investment in important ways.
Divestment and defunding sounds complicated. Do I have to be an expert to start a campaign?
Nope. These types of campaigns, historically, have been successful when a groundswell of public opinion about the morality of the issue hits our decision makers. It’s about building up people power. Stick to the moral arguments, the experts will come to debate the particulars. You are an expert in what’s best for you. Don’t let the decision makers lock you out of the conversation about your pensions or public funds.
Can shareholders pressure fossil fuel companies without divesting?
Shareholder action can be an effective tool to make small reforms at a company, such as pressuring Apple to introduce better labor practices at the factories it works with in China. Over the last two decades, there has been numerous attempts to use shareholder action to change the behaviour of the fossil fuel industry, as well. While there have been some limited successes — instituting sustainability practices inside the company, for instance — no shareholder resolutions have been able to address the core business model and problem with this industry: the massive amounts of carbon they insist on dumping into the atmosphere for free. Voting for climate friendly resolutions is a good thing to do, but it’s not going to solve the root of the problem. Scientists say that in order to keep warming below 2°C, we need to leave about 90% of the fossil fuel industry’s current reserves underground. This is an achievable goal, but it’s the type of move that no group of shareholders would ever vote for willingly. Make no mistake, Exxon could still make a profit as an energy company if it transitioned its massive wealth and expertise over to renewables, but they’ll do it only if they forced by government regulation, not because they willingly decide to make the move.
That’s why it’s time for divestment. We need to make the moral stakes of our current situation clear: the fossil fuel industry is wrecking the planet, and it’s immoral to profit off that wreckage. Divestment is a clear and powerful action that helps build the case for government action, along with making the economic point that we should be moving our money into alternative, safe and future-proof solutions. If we’d started this campaign 30 years ago, then shareholder action would make more sense, but with the rapidly closing window for action, we need to act swiftly and boldly. Divestment can be an uncomfortable step to take, but it’s the right thing to do — and it will make a far greater impact than any shareholder resolution we could ever pass.