Institutional Investors Divesting Holdings in Fossil Fuels

Here’s an article that reminds us that every day, we see more evidence of the fact that divestment campaigns, i.e., the drive to get institutional investors to divest their holdings in fossil fuel companies, are gaining strength.  Though it’s hard to imagine this making a serious impact on the ability of the oil, gas and coal companies to raise the capital they need to continue and expand their operations, this is nonetheless incredibly powerful stuff, for at least two different reasons. 

First are the public relations repercussions that are affecting the reputation of the industry at an ever-increasing rate.  One has to think that the ongoing barrage of statements from some very visible and respectable people will eventually have a significant effect on the American psyche as it applies to energy policy.  We’re talking about people like:

• former EPA chief Lisa Jackson in her commencement speech at American University in which she said, “I salute this school and its students for facing head-on the issue of investments in fossil fuels and what that means to your individual futures,” and

• the president of Vermont’s Sterling College, who, in his comment on the vote to divest in February of this year, told the audience, “It makes no sense for us to invest in companies that are wreaking havoc on our climate.”

The second reason divestment is important is that it raises the question: What to do with the freed up capital?  One thought process might be:  “Hmm.  We just dropped out of the business of dirty energy.  Perhaps we should enter the business of…what’s that?  Clean energy?”

Now that’s a light bulb of an idea.