Study finds that size of asset portfolios that have pledged divestment from fossil fuels has doubled to $5.2 trillion in assets over past 15 months

Written By: Stratton Report
December 12, 2016

On December 12, DivestInvest announced that the scope of global fossil fuel divestment has doubled over the past 15 months, with institutions and individuals controlling $5.197 trillion in assets pledging to divest.

Apparently basing its conclusions on a new analysis released by Arabella Advisors, 688 institutions and 58,399 individuals across 76 countries have committed to divest from fossil fuels. The announcement comes on the first anniversary of the Paris Agreement on climate change.

May Boeve, Executive Director of 350.org, an organization that has promoted the divestment initiative, remarked:

“As the hottest year in history comes to a close, the success of the global fossil fuel divestment movement is undeniable. What began on a few college campuses in the U.S. has spread to every corner of the world, squarely into the financial mainstream. DivestInvest has permeated every sector of society: from universities and pension funds, to philanthropic and cultural institutions, to cities, faith groups, insurance companies and more. Now at $5 trillion, the movement is unstoppable. Institutions and investors must choose whether to be on the right side of history.”

UN Secretary-General Ban Ki-moon noted: “One year after the adoption of the historic Paris Climate Agreement, it’s clear the transition to a clean energy future is inevitable, beneficial and well underway, and that investors have a key role to play. I commend today’s announcement that a growing number of investors are backing a shift away from the most carbon intensive energy sources and into safe, sustainable energy. Investments in clean energy are the right thing to do — and the smart way to build prosperity for all, while protecting our planet and ensuring no one is left behind.”

According to DivestInvest, support for the initiative has increased among profit-driven institutions such as large pension funds, private insurers and banks, which represent $4.5 trillion in assets, citing climate risks to their investment portfolios.

Lou Allstadt, former Executive Vice President of Mobil Oil noted: “The oil and gas industry is currently experiencing an unprecedented level of negative factors — from reduced profits to increased borrowing to pay dividends — while the costs of solar, wind and batteries continue to fall. The prudent fiduciary is acting now to reduce the risk to their portfolios. DivestInvest is speeding up the clock on the final accounting that will show fossil fuels are out and clean energy is in.”

Ellen Dorsey, Executive Director of the Wallace Global Fund and leader of DivestInvest Philanthropy noted: “At the one-year anniversary of Paris, and after a historic election in the U.S., divestment is needed more than ever. When governments fall short, people step up. From Apartheid South Africa to the climate frontlines, finance is a proven lever for change. Governments should keep their promises, but investors must move their money.”