« Back to Publications

The fossil fuel divestment game is getting bigger, thanks to the smaller players

Luke Kemp writes in The Conversation (12.9.16) about the gathering pace of the fossil fuel divestment campaign, which has been bolstered recently by the decisions of several local government councils, financial institutions and universities to pull their investments out of companies linked to fossil fuel mining and production.

‘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.’

The TJRyan Foundation does not guarantee the accuracy, currency or completeness of any information or material available on this website. The TJRyan Foundation reserves the right to change information or material on this website at any time without notice. Links from this site to external, non-TJRyan Foundation websites should not be construed as implying any relationship with and/or endorsement of the external site or its content by the TJR Foundation, nor any commercial relationship with the owners of any external site. Should any TJRyan research project be funded by an individual or organisation the source of funding will be stated beside the research report. In all other cases contributions are provided on a pro bono basis.
Receive the latest news

Subscribe To Our Newsletter

Get notified about new articles

This field is for validation purposes and should be left unchanged.