‘Fossil fuel divestment is gathering pace around Australia and the world. More and more individuals and organisations are pulling their investment assets out of companies involved with the exploration, extraction, production or financing of fossil fuels.
‘The underlying reason is the brutal maths of climate change: to keep global warming within 2℃ of pre-industrial levels – as both scientists and the Paris climate agreement say we must – around 80% of declared fossil fuel reserves need to stay in the ground.
‘So far, 580 institutions, controlling assets worth about US$3.4 trillion, have divested from fossil fuels. The top four types of divest institutions are faith-based groups, foundations, governments and educational institutions. The pattern in Australia is largely the same.
‘… Beyond an underlying recognition of a need to move to a low-carbon economy, the trends driving the current flurry of divestment are manifold. Part of the impetus is due to the growing financial case for divestment itself. This means that divestment, far from being a decision made in spite of lower financial returns, can actually lead to better returns.
‘International events are probably also driving this year’s prominent moves. The negotiation of the Paris Agreement late last year, and its recent ratification by both China and the United States, may make continued investment in fossil fuels seem riskier.
‘But the strongest force behind divestment seems to be simple public pressure from concerned citizens, investors and students. At every Australian university that has announced plans to divest, the decision has been made after lengthy “fossil-free” campaigns by students and academics. It has been a bottom-up phenomenon, rather than top-down, proactive actions by the administration.’
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