What is divestment?
Divestment is the opposite of an investment–it simply means getting rid of stocks, bonds or investment funds, often for ethical reasons. Institutions like universities put millions in these kinds of investments to generate income. Divestment movements have worked in the past, particularly around apartheid in South Africa. Fossil fuel investments are a risk for investors and the planet–that’s why we’re calling on York to divest from these companies.
Why divestment as a strategy?
It’s time to go to the root of the problem –the fossil fuel companies themselves–and make sure they hear us in terms they understand, like their share price. Shareholder engagement doesn’t work with the fossil fuel industry – we aren’t seeing change fast enough and their entire business model is based on continually extracting more dirty fossil fuels, like oil and coal. At the same time, it’s crucial for the divestment movements to support other tactics, including taking direct action against pipelines and supporting land defenders.
What kinds of companies is York invested in?
As of Sept. 2014, York’s endowment fund has investments of over $8 million in 10 companies directly involved in the extraction of oil, gas and coal (1). Most of these companies are engaged in hydraulic fracturing (or fracking) in the United States, which is linked to groundwater contamination and high carbon emissions.
These figures do not include construction or engineering companies hired by the industry, nor the investments in pooled funds. The holdings of these funds are not publicly available. However, the Investment Committee of the Board of Governors could instruct its money managers to exclude fossil fuels from their investments.
How can one university divesting really make a difference?
Divestment isn’t primarily an economic strategy, but a moral and political one. The more we can make climate change a deeply moral issue, the more we will push society towards action. We need to make it clear that if it’s wrong to wreck the planet, than it’s also wrong to profit from that wreckage.
At the same time, there are certain economic impacts. Collectively, universities hold billions of dollars in their endowments. Each university that divests puts more pressure on the others, not to mention other big investors like state pension funds and religious organizations.
While sale of stock might not have an immediate impact on a fossil fuel company, what it does do is start to sow uncertainty about the viability of the fossil fuel industry’s business model. Divestment also starts to build momentum for moving money into clean energy, community development, and other more sustainable investments.
What are we asking for?
We want York to immediately freeze any new investment in fossil fuel companies, and divest from direct ownership and any commingled funds that include fossil fuel public equities and corporate bonds within 5 years.
Won’t York lose money by divesting from fossil fuels?
No. Fossil fuel companies are becoming riskier investments. Coal, oil and gas companies’ business models rest on emitting five times more carbon into the atmosphere than even conservative estimates say we can handle. Investor fears over low oil prices and limited pipeline infrastructure has already hurt the share prices of companies operating in the tar sands over the past year (2). Report after report has shown that investing in clean energy, efficiency and other sustainable technologies can be even more profitable than fossil fuels (3). Over $210 billion was invested in renewable energy globally in 2013 (4).
What can I do?
Join Fossil Free York! Sign our petition calling on York to divest from fossil fuels.