A group of 17 leading foundations has announced a new initiative to encourage fossil fuel divestment by the philanthropic community. Called Divest-Invest Philanthropy, the new effort launched Jan. 30 in support of a growing movement among other nonprofit endowments, including academic, health, pension and religious foundations.
Divest-Invest comes at a time when climate-related events are shining a spotlight on the future risks that fossil fuel investors face, as highlighted by the Jan. 15 Ceres Investor Summit on Climate Risk.
Also of interest to investors is the long-awaited State Department Keystone XL pipeline report, which was finally released on Jan. 30.
The report identified a number of risks and impacts, including several related to environmental justice issues. The next step in the review process promises to be even more interesting, as it includes a public comment period and input from the Environmental Protection Agency and at least seven other federal agencies - the Departments of Defense, Justice, Interior, Commerce, Transportation, Energy and Homeland Security.
The initiative was launched with an open letter to the philanthropic community, signed by all 17 foundations. The letter is worth a read in full, as it provides a clear, plain-language outline of the risk to investors from business-as-usual investment strategies, so following are just a few samples.
The group makes no bones about the fossil fuel divestment effort's roots in anti-Apartheid activism, writing that:
...today’s movement argues that mission-based institutions whose goals and constituencies are threatened by the extraction and combustion of fossil fuels should not also seek to profit from them. It exposes the fossil fuel industry’s efforts to block progress to a clean, renewable energy future, and argues for new investments that will advance climate solutions rather than drive the crisis.
The financial consequences will be devastating:
There is growing recognition that if we hope to maintain a livable climate, the majority of fossil fuel reserves now on the world’s books will become stranded, unusable assets...Fossil-fuel stocks, whose valuations are linked to reserves, are thus vastly over-valued, with conservative estimates pointing to a multi-trillion dollar 'Carbon Bubble,' many times the recent $2 trillion housing bust.
As part of that mission, the Divest-Invest website (here's that link again) offers a variety of educational and informational resources, including white papers on divestment risk management, fiduciary responsibility issues, and investment opportunities and guidance.
Image (cropped) by doctor wonder
Tina writes frequently for TriplePundit and other websites, with a focus on military, government and corporate sustainability, clean tech research and emerging energy technologies. She is a former Deputy Director of Public Affairs of the New York City Department of Environmental Protection, and author of books and articles on recycling and other conservation themes. She is currently Deputy Director of Public Information for the County of Union, New Jersey. Views expressed here are her own and do not necessarily reflect agency policy.