Divestment and Reinvestment are tactics in our climate defense toolkit. They operate in the sphere of finance and investment. They give each of us the opportunity to align our personal investments – be those retirement, private, or even vested pension entitlements – with our values and our visions for a post-fossil-fueled world.
The sector of climate-based divestment and reinvestment can be considered as a component of the broader “socially responsible impactful” (SRI) investing philosophy.
Divestment and reinvestment can be practiced at several levels and in several forms. It can be applied to the investments we hold as individuals. It can be applied at the institutional level (e.g., church, denomination, college or university, municipal pension funds, union pension funds, philanthropic funds, …). And it can be applied, again at the personal level, in the banks we deposit our money at for safekeeping.
Each level of divestment-reinvestment opportunity is worth considering and exercising. Granted, the institutional level holds the largest opportunities…
See a personal story related to divestment and reinvestment below.
What is Divestment?
When you invest your money, you might buy stocks, bonds, or other investments that generate income for you. Universities (and colleges in the US), as well as religious organizations, retirement funds, and other institutions put billions in these same kinds of investments to generate income to help run their institutions.
Divestment is the opposite of an investment — it simply means getting rid of stocks, bonds, or investment funds that are unethical or morally ambiguous. Fossil Fuel investments are a risk for investors and the planet -– that’s why we’re calling on institutions to divest from these companies.
Put another way, making money off investments that are wrecking the planet is just wrong.
What is Reinvestment?
Reinvestment means making deliberate choices about how your money is invested – and making those choices represent values of sustainability, community empowerment, action on climate, establishment of a renewable energy economy, etc.
The objectives of reinvestment can include increasing community empowerment and prosperity, shifting economic control, driving social equity, and promoting ecological wellbeing.
What does “the Math” Say About Fossil Fuel Investments?
In order to keep global warming below 2°C, a target that the United States and nearly every other country on Earth has agreed to, the International Energy Agency calculates that the fossil fuel industry will need to leave approximately 80% of their reserves of coal, oil, and gas unburned. Those reserves may be below ground physically, but they’re already above ground economically and factored into the share price (and value) of every fossil fuel company. Globally, the value of those reserves is around $20 trillion, money that will have to be written off when governments finally agree to outlaw fossil fuel use. By divesting from fossil fuels, individuals and institutions not only build the case for government action, but they also start this important discussion about the fossil fuel industry’s “stranded assets.” (from https://350nyc.org/fossil-free-nyc/ ).
Continuing to invest in fossil fuels and any related infrastructure is simply an imprudent choice. And the sooner we accept this and start acting accordingly, the better.
Why are Divest and Reinvest Important to the Climate Movement?
There is no argument that money is the lifeblood of the United States. Moving the money can reflect our values. Moving the money can, ultimately, affect the operations of the targeted corporations. Moving the money makes a statement about the ethics of the situation.
Moving the money can also be a very pragmatic way of securing wealth against the impacts of fossil fuel regulations and stranded assets.
In the broadest sense, it’s the investment in renewables that needs to be focused on. For most of us and for most institutions, that means taking money from somewhere else. Why not take it from the fossil fuel fools?!
What are the Results so Far?
Check out this article from The Guardian: Fossil fuel divestment funds double to $5tn in a year
Internal (350 network) Resources for Institutional Campaigns:
- Larry Coble, Chicago 350
- Mark Dunlea, 350NYC and PAUSE (People of Albany United for Safe Energy)
- Jeffrey Weisner, 350 Montgomery County (MD)
Contact Jerome at 607-348-5773 for email addresses
Personal Divestment Blog: Shades of Green:
If you’re trying to figure out what to do about your investment portfolio, we recommend Mimi Hoffman’s blog: Shades of Green . It is entertaining and informative, and it has pearls that will be relevant no matter the size of your portfolio or how green you want to go. And she welcomes your feedback. Divestment and reinvestment are powerful tools in the climate change movement. Click on Shades of Green, read the entries in order starting with the first, and challenge yourself to take the next step!
Dig in and Pace for the Long Haul! The funds, markets, and institutions we are focused on have taken decades getting to their present “comfort levels” and operational norms. Even after committing to divest, institutions may take 5 years or more to actually complete the required analyses, decision-making, and transactions. Even at the personal level, it will take time to move ahead.
Gather a committed group and manage that resource compassionately!
Do a Lot of Homework! What institutions are locally available to you for in-person lobbying? What is the size of their investments or endowments and the composition of their portfolio? Which might be moveable on the issue? Who are the power-holders (perform “power mapping”)? Who are the important constituents of the decision-makers? What personal connections can be leveraged? Etc.?
Be Ready to Make and Maintain Relationships! The present and future beneficiaries of pension plans are vital constituents in a divest-reinvest campaign. They and their leaders will need education, persuasion, and persistence to gather the confidence needed to advance a divestment and/or a reinvestment proposal. Maybe there are folks on your divest team that are natural aces at this kind of engagement.
Consult with those who share your motivation and have experience (like the 350 Network resources listed elsewhere on this page)!
You’re Ready to Start Divesting and Reinvesting Now?! Great! Welcome Aboard!
Study the fossil fuel implications of many funds here: FossilFreeFunds.org
A Guide to Personal Divestment: https://gofossilfree.org/usa/your-roadmap-to-personal-divestment/
The Guardian presents A beginner’s guide to fossil fuel divestment
From The Beam (January 2017): An introduction to Fossil fuel divestment — what is the current status and does it work?
SRI Investing Advisors
This is a select listing; provided simply by way of information; 350NJ makes no explicit recommendations nor endorsements in this regard; further, 350NJ is receiving no benefits as a result of providing this information; lastly, no guarantees of future performance are to be implied from this list:
- Common Interests Financial commoninterestsfinancial.com
Mr. Robert (Bob) Goellner
160 Durham Ave; Suite 105; Metuchen NJ 08840
- Gitterman Wealth Management www.gittermanwealth.com
Offices in Hamilton and Edison NJ and New York NY
Mr. Adam Bernstein
- Joyce Moore Financial Services www.jmfs.com
P. O. Box 175; Macungie, PA 18062-0175 (Allentown area)
- First Affirmative Financial Network
5475 Mark Dabling Boulevard, Suite 108
Colorado Springs, Colorado 80918
800.422.7284 | 719.636.1045
Recording of 350 Leaders Call of May 11, 2017, which focused on divestment campaigns: https://soundcloud.com/350org/local-divestment-campaigns-may-2017?in=350org/sets/north-america-monthly-local
350NYC Divestment Resources: https://350nyc.org/resources/divestment/
Fossil Free NYC: https://350nyc.org/fossil-free-nyc/
350.org presents Global Divestment Mobilization
Global Catholic Climate Movement presents Global Divestment Mobilization 2017: Organizing Guide
By the Mayors Innovation Project: http://www.mayorsinnovation.org/images/uploads/pdf/MIPModelCityOrdinance.pdf
A Personal Story about Divestment and Reinvestment (from Jerome Wagner)
After 4 years of “effort,” I have only partially completed my divestment-reinvestment journey. But I persist! Let me tell you more 😊
My “divest-reinvest journey” began a few years ago at an introductory workshop on sustainable investing which was convened by 350NJ. The workshop introduced me to funds which were available to meet climate-preserving goals and to a financial adviser working in that field. The idea of “Sustainable – Responsible – Impactful” (“SRI”) investing was meaningful to me on a broad basis, so it made sense to me immediately to try to be more thoughtful and deliberate with the money I have.
I started with baby-steps. The first step was an evaluation of my personal investment situation. I did this in consultation with an SRI investment practitioner – Mr. Robert Goellner. He and his team took me through what I needed to know to make responsible choices. My initial modest investments from personal savings were in alternative energy, water systems and a diversified fund. I have experienced some erosion of principal but at present the combined performance is positive and the outlook is fine. My confidence in my SRI advisor having been validated, I moved a significant portion of IRA holdings into SRI investments in April, 2017.
Throughout this period, I have also been challenging the manager of my IRA to move my money to holdings with better SRI and climate scoring. That effort has been worthwhile.
Yes, my experience (and impact) so far has been very minute – barely an iota in the universe of financial wealth. I have only partially transitioned my personal investments, and I have yet to dive into an institutional divest-reinvest campaign. Still, I am hopeful, knowing that I am on the journey, that I have made some changes, that I have a good partner in my SRI advisor, and that others are making the same changes for themselves.
To discuss this in more detail, contact Jerome at 607-348-5773.