Author:   |   Category: Green Ideas   |   Time to read: 5min

Divestment is a process on the opposite side of investment. It implies withdrawal of stocks, bonds or investment funds from fossil fuel companies. At the same time divestment is a powerful political tool to point out core problems, to target perpetrators rather than users/victims and to point out necessary changes of the financial system.

Throughout history there have been several divestment campaigns that contributed to changes in sectors they had targeted. For ex. campaigns against military actions in Darfur, Tobacco industry, etc.  Perhaps the most famous example was the Divestment campaign as regards the Apartheid system in South Africa.

Concerning Divestment from fossil fuels, the argumentation is built around 3 arguments:

  1. Moral argument – To illustrate it, the best way would be to quote Bill McKibben, co-founder of 350.org: “If it’s wrong to wreck the climate then it’s wrong to profit from that wreckage”. To reach the Paris climate goals, up to 80 percent of fossil fuel reserves have to remain in the ground.
  2. Democratic argument – is applicable to investment funds over which citizens should have ownership. Pensions funds, Universities, Local authorities and city/municipal governments, etc. These investments must be transparent and citizens must have a say in the way money is used. If we elect local governments on bases of their political programme we must ensure that their investments with public money are also following the same political line. Having said that, as so many elected politicians on different levels pledge their support and will to combat climate change, one could expect huge amounts of public funds to be divested from fossil fuel industries any time soon.
  3. Financial argument – If a vast majority of fossil fuel reserves will not be used due to strict climate policies, fossil fuel companies (and their shares) will lose value dramatically. Therefore, foresighted investors are already backing out of fossil fuel investments, not (only) for moral reasons, but because of the financial risk these investments are bearing.

Divestment is not only about stopping or slowing down damaging processes. The potential of divestment lies in the fact that financial means remain at our disposal to invest them in sustainable activities/industries. Investing in a development of renewable energy will never be easier than in times when we divest public and private money from fossil fuel industries.

The real power of divestment is in the fact that it delegitimizes the fossil fuel industry and that it expands a notion of political participation to finances and raise the demand for full transparency and accountability of the ones we elect to govern.

At the end, it is important to mention the campaign Divestment from Fossil fuels. It is clear that the world energy supply cannot continue on its fossil basis and that complexity of climate change needs to be tackled through different means. One thing we can do is to demand, among others, our municipalities, our banks, our universities, our pension fund, our churches, and our insurances to divest from fossil fuels. Divest now!

/Vesna Jusup 

Works with member relations at the European Green Party secretariat 

Former project leader at Cooperation and Development Network of Eastern Europe 






The blog was originally published on Green Forum website on 15 June, 2016