Not just faster than apartheid divestment; faster than divestment from tobacco, armaments, and others: fossil fuel divestment. It’s not about direct reduction of market capitalization; it’s about making it socially unacceptable to buy from stigmatized companies, and it works, and it’s working faster than ever for fossil fuels. Oh, and fossil fuel companies are a tiny sliver of university endowments, so ditching them is pain free, especially now that fossil fuel stock prices are not rising while solar stocks skyrocket (and nuclear stocks don’t). Go fossil free, go VSU.
|Stranded Assets and the Fossil Fuel Divestment Campaign: What Does Divestment Mean for the Valuation of Fossil Fuel Assets? 8 October 2013 | Authors: Atif Ansar, Ben Caldecott, James Tilbury|
A campaign to persuade investors to take their money out of the fossil fuel sector is growing faster than any previous divestment campaign and could cause significant damage to coal, oil and gas companies, according to a study from the University of Oxford.
The report compares the current fossil fuel divestment campaign, which has attracted 41 institutions since 2010, with those against tobacco, apartheid in South Africa, armaments, gambling and pornography. It concludes that the direct financial impact of such campaigns on share prices or the ability to raise funds is small but the reputational damage can still have major financial consequences.
“Stigmatisation poses a far-reaching threat to fossil fuel companies — any direct impacts of divestment pale in comparison,” said Ben Caldecott, a research fellow at the University of Oxford‘s Smith School of Enterprise and the Environment, and an author of the report. “In every case we reviewed, divestment campaigns were successful in lobbying for restrictive legislation.”
The report is part of a new research programme on stranded assets backed by Aviva Investors, HSBC, Standard & Poor’s and others. It found: “The fossil fuel campaign has achieved a lot in the relatively short time since its inception.”
Tobacco divestment went pretty fast once Harvard kicked in, but fossil fuel divestment is already going faster even before Harvard joins in.
The study explored the direct effects of divestment and found that that wasn’t the point: the amount withdrawn would still be small compared to fossil fuel company capitalization.
However, the team concluded: “The outcome of the stigmatisation process, which the fossil fuel divestment campaign has now triggered, poses the most far-reaching threat to fossil fuel companies and the vast energy value chain.”
And that stigmatization can lead to the stigmatized companies being shunned for contracts, especially by governments. And that hits them in the sales.
Bill McKibben, the environmental campaigner who leads the 350.org divestment campaign which is expanding from the US into Europe this autumn, said: “This divestment campaign is just one front in the climate fight, but of all the actions people can take to bring about structural change, it’s probably the easiest. Severing our ties with the guys digging up the carbon won’t bankrupt them—but it will start to politically bankrupt them, and make their job of dominating the planet’s politics that much harder.”
Leave those fossil fuels in the ground. Put solar panels on rooftops and windfarms offshore.
It’s not that hard. Fossil fuels are a sliver of university endowments:
And fossil fuel stocks are stagnant while solar stocks skyrocket.
So a tiny effort by universities can kick off an effect that can topple the mighty fossil fuel industry.
Plus fossil fuel divestment can help undermine the political power of the fossil fuel industry and thereby get its sooty grip off our governments. Go fossil free; go politically free.