Divestment & Reinvestment
Divestment from fossil fuel and carbon intensive companies has already begun. As the saying goes, “The train is already leaving the station.” The question becomes whether divestment will happen quickly enough to allow us a chance of keeping the warming of Earth under 2°C as is being negotiated under the Conference of Parties to the Kyoto Protocols. And many scientists now assert that the 2°C limit is too loose and a limit of 1.5°C is required to avoid runaway climate change and the collapse of civilization.
So a broad divestment by the world’s largest sovereign wealth fund would be a major milestone in the attempt to avoid disaster. And with the weakness exhibited by the fossil fuel sector, divestment sooner rather than later also makes good economic sense.
There is thus a two-fold risk avoidance from divestment; avoidance of the climate risk and avoidance of the economic risk involved in what is commonly called ‘the Carbon Bubble’.
The other side of the issue is what to do with funds divested from doubly risky securities. The short answer is reinvest them in the companies we want to and must see grow in order to avoid runaway climate change. It is simple, common sense that the Government Pension Fund should be investing in the ‘goods’ we want to see more of not the ‘bads’ we need to see less of for the survival of our children.
In this case the ‘goods’ are companies manufacturing and deploying renewable energy technologies, developing and deploying materials and energy conserving technologies, etc. Whole cities are in need of building weatherization on a massive scale that would greatly reduce energy loads to heat and cool. The deployment of these technologies requires visionary investors to provide capital in the growth stages of industries that need to expand quickly if we are to avoid the 1.5°C that would give us fighting chance at avoiding the runaway climate change.
So won’t you please Add Your Voice to our call for divestment.