There are a few levers of power that can shut down fossil fuel companies, one of which is to cut off their supply of money. And investors are starting to do just that in increasingly greater numbers.
On Thursday, a new milestone was reached. A coalition of environmental groups who monitor divestment released a report at the Poland climate talks showing that the number of groups pulling their money out of fossil fuels had reached 1,000. Together, these groups manage nearly $8 trillion worth of funds.
Divesting from fossil fuels follows a similar playbook from the campaign to divest from South Africa during apartheid. The goal in this case isn’t to spur radical political change, but rather help spur a radical decrease in carbon pollution needed to avoid the worst impacts of climate change.
The movement has grown by leaps and bounds since the Go Fossil Free campaign, the umbrella for the groups forcing the issue, began tracking divestment in 2012. Then, 181 institutions managing $50 billion in assets were on board with divestment. The leap to 1,000 institutions and $8 trillion in just six years shows how fast the movement has grown up, though even as more action is needed. Announcing it at the Poland climate talks is one way to spur some of those actions.
“While diplomats at the UN climate talks are having a hard time making progress, our movement has changed how society perceives the role of fossil fuel corporations and is actively keeping fossil fuels in the ground,” May Boeve, the executive director of 350.org who is involved in the divestment campaign, said in a statement.
Major cities like New York and London have made headlines for divesting and asking other cities to follow their lead. Ditto for Ireland, the first country in the world to move toward divesting from fossil fuels entirely. But the new report notes that the groups divesting are diverse and include faith-based organizations, governments, foundations, educational institutions, and pension funds. Caisse des dépôts et consignations (CDC), France’s public sector pensions, is the group that tipped the scale as the thousandth divestor.
The $8 trillion doesn’t represent how much money is being pulled out of fossil fuels, but rather how much money these groups manage. But it does show that these aren’t just mom and pop stores and crunchy hippies living in the woods (though that they are certainly welcome to divest!). And it follows a trend of increasing corporate responsibility to not let the society burn to the ground while also protecting investors from bad losing money.
What’s more, it appears to be working. A recent Goldman Sachs report blamed divestment in part for coal’s steep decline and warned Big Oil could suffer the same fate if it doesn’t get it’s act together.