Day 27: Divest/invest

Today’s action: Getting your money to take climate action (The Sequel)

We’re back to money today, but now we’re focusing on divestment and investment. No idea what we’re talking about? You’re not alone! Divestment is moving money out of investments that are linked to climate change (like big coal, oil, and gas companies). If you’d like, here’s a 2 ½-min video explanation.

What does divestment have to do with you? More than you might think! Today’s action is to take a look at your own investments OR to push for institutional divestment. (Though if you’re feeling ambitious today, we won’t stop you from doing both!)

Option 1: Check your own investments or retirement plan

• Look into whether your personal investments in mutual funds/ETFs are linked to fossil fuels, and explore alternative options. Visit FossilFreeFunds.org to search funds in your personal portfolio. If your investments score poorly, consider switching to ones that don’t fuel climate destruction. Look for fossil free funds at that same site, or check out Pebble Finance, an app that allows you to invest passively while taking out the stuff you don’t like (like Big Oil). If you use a financial advisor, talk to them about your options (see the “looking for more” section below if you want tips on this).

• Check whether your pension/retirement plan is linked to fossil fuels and whether you have more sustainable options. You can find step-by-step guidance here, including a draft email for contacting your plan administrator. The website also has info about the retirement plans of a handful of large US employers.

  • If you’re in the UK and want to understand your pension options, visit Make My Money Matter or ShareAction.

Option 2: Push for fossil fuel divestment by an institution or city:

• Are you affiliated with a university (as an alum, student, or employee)? Check this database to see whether it has divested. If not, find a way to voice your support for divestment. As an alum, you could write proactively, or simply wait for a donation request and then raise it. (See the “looking for more” section below for a sample letter. Pro tip: draft your email now so it’s ready to go!)

• Do you live in a large city? At least 19 major global cities have committed to divest (US cities include Chicago, Seattle, New York, Los Angeles, New Orleans, Pittsburgh). If yours isn’t one of them, then call or write your local representative or mayor to urge divestment. (And because it’s more fun to take action with others, you can use this map to find a local group working on this.)

• Are you otherwise affiliated with an organization that would be open to divesting from fossil fuels and investing in climate solutions? Raise the idea with them! Organizations ranging from faith-based institutions to pension funds can take the DivestInvest Pledge here or register their divestment commitment here.

(If you'd rather use a quick one-stop shop page for divestment, this site's got you covered, though you need to sign up for a Pebble Finance account to use it.)

Why this action? Divestment puts pressure on fossil fuel companies, both by removing some of their “social license” and by making it harder for them to raise capital. There are strong arguments that, at this point in history, divestment is both a moral imperative and financially prudent. As the President of Harvard stated last year when announcing the university’s divestment, “We must act now … to address this crisis on as many fronts as we have at our disposal.”

Your support for divestment by institutions or cities helps to keep the pressure on. So do your actions as an investor or pension fund participant, with the added bonus of helping to better align your investments with your priorities. By one estimate, getting your money to take climate action also may be the most effective individual action you can take.

Looking for more? Read on for tips, info, and further actions related to divestment (as well as a note on the importance of proxy voting if you do happen to have fossil fuel investments!).

Tips:

• If you work with a financial advisor who isn't familiar with sustainable investing, you can use this toolkit or suggest they check out YourStake. (And we’re sure you know this, but we are not qualified to give you financial advice! Don’t take any of today’s action as specific financial advice!)

• If you want to send a letter to a university, see here for an example from Kaitlin; feel free to use/adapt it for your own purposes. If you write a university, consider sharing your letter with fellow alumni who might also be interested in responding similarly. The more people who raise divestment as an issue, the more attention the issue will get.

Learn and reflect

• Our actions today focused primarily on the importance of divestment from fossil fuels and investment in climate solutions, for the reasons outlined above. You can learn more about Divest/Invest efforts here.

• Want a deeper dive? Use the Global Fossil Fuel Divestment Commitments Database to explore which institutions have already divested, and read more about how, as of October 2021, 18 cities representing over 50 million people and over 400 billion dollars in assets under management have committed to C40’s “Divesting from Fossil Fuels, Investing in a Sustainable Future” pledge.

• There’s a strong case for divestment, but a different approach focuses on active engagement. This op-ed argues for staying invested so you can vote on all relevant ESG issues. If you continue to invest directly in companies linked to climate change, an important climate action is to commit to voting in all relevant proxy votes this spring.

Act

• If you’re still looking for a way to support divestment, this site lists ongoing divestment campaigns, and provides resources for starting your own. (We didn’t flag it above only because it’s hard to tell if some of the campaigns are still ongoing.)