Divestment is Actually Hurting Fossil Fuel Companies

by Sami Grover

And we thought it was all about symbolism…

It’s been amazing to watch how the fossil fuel divestment movement has grown in a few short years. When Harvard students voted to divest back in 2012, for example, the conversation was mostly about undermining Big Energy’s social license to operate. A year later, when Bill McKibben made the case for divestment he focused mostly on the idea of churches, universities and other symbolic institutions making these companies ‘pariahs’.

Now, in honor of the 1,000th institution signing up to divest (bringing the total value to nearly $8 trillion) Bill McKibben has an excellent update on the state of the movement over at The Guardian. While the symbolism of all this still matters, says the maestro, it’s also becoming clear that divestment has become a very real financial force in and of itself:

Peabody, the worlds biggest coal company, announced plans for bankruptcy in 2016; on the list of reasons for its problems, it counted the divestment movement, which was making it hard to raise capital. Indeed, just a few weeks ago analysts at that radical collective Goldman Sachs said the divestment movement has been a key driver of the coal sectors 60 percent de-rating over the past five years. [...] Now the contagion seems to be spreading to the oil and gas sector, where Shell announced earlier this year that divestment should be considered a material risk to its business.

Indeed, no sooner does McKibben write this piece and Cleantechnica reports that Westmoreland, the 6th largest coal company in the US, is filing for bankruptcy too.

True, divestment is hardly the only reason certain fossil fuel companies are in trouble. 42 percent of coal plants are losing money already, and that figure is only going to get worse as renewables get cheaper and polluting gets more expensive. Similarly, Big Oil may not be sweating the Tesla Model 3 just yet, but there’s a growing list of diverse threats that could soon converge to put a dent in demand.

And that’s the thing: Incumbents seem invincible until one day they are not. And anyone who knows anything about climate change is beginning to realize that there is no sane, sustainable or morally justifiable version of the future in which we continue to burn fossil fuels any longer than we have to. As Mark Carney, Governor of the Bank of England, has said: Most fossil fuels are unburnable. And that makes them basically worthless.

Investors would do well to take note.

Related at Care2

Image via Thinkstock

32 comments

Mary B
Mary B2 months ago

We've been telling these polluting industries FOR YEARS that we WANT cleaner energy sources. It's way past time they paid attention regardless of how much is left in the ground.

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heather g
heather g2 months ago

It is admirable that so many are taking positive steps about progress away from fossil fuels.

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Leo C
Leo Custer2 months ago

Thank you for posting!

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Mely Lu
Mely Lu2 months ago

thx

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Glennis W
Glennis W2 months ago

Very informative Thank you for caring and sharing

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Glennis W
Glennis W2 months ago

Great info Thank you for caring and sharing

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Glennis W
Glennis W2 months ago

Thank you for caring and sharing

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Glennis W
Glennis W2 months ago

Interesting Thank you for caring and sharing

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Chad A
Chad Anderson2 months ago

Thank you.

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Ingrid A
Past Member 2 months ago

tyfs

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