Divestment is the opposite of an investment – it simply means getting rid of stocks, bonds, or investment funds that are unethical or morally ambiguous.
Fossil fuel investments are a risk for investors and for the planet.
Fossil fuel divestment takes the fossil fuel industry to task for its role in the climate crisis. By naming industry’s singularly destructive influence and by highlighting the moral dimensions of climate change, the fossil fuel divestment movement can help break the hold that the fossil fuel industry has on our economy and our governments.
The most prominent divestment campaign in the past was the effort pressuring institutions to divest from companies doing business in South Africa during apartheid. The movement sparked dialogue about apartheid, stigmatized a racist regime, and eventually led to US sanctions against South Africa.
How Fossil Fuel Divestment Makes an Impact
Firstly, divestment aims to stigmatize the fossil fuel industry, revoke the industry’s social license, and weaken its political influence.
Secondly, divestment is building a powerful movement that involves an inclusive tactic — everyone is part of an institution that has something to divest (state pension fund, religious institution, personal investments – the list goes on), and connecting these institutions to the climate change question could catalyze a historic social movement.
A Fossil Free Africa
No continent will be struck as severely by the impacts of climate change as Africa. Our long-term prosperity, as well as the survival of already vulnerable populations is under threat from the adverse impacts of fossil fuel use.
So last month, we launched the Fossil Free divestment campaign in Africa.
Why? Because 2014 is on track to be a record year for global CO2 emissions yet global commercial banks investments in coal have continued to increase. In 2013, banks globally provided more than R880 billion ($88 billion) to the main 65 coal companies, over four times the amount provided in 2005.
And South African banks are playing a crucial role in financing Africa’s growing addiction to fossil fuels, the biggest emitters of CO2 and other greenhouse gas emissions that drive global climate change.
Despite various corporate sustainability claims, figures from the recent annual reports of Nedbank, Standard Bank and Absa / Barclays show a combined R10 billion of direct financing for coal projects between 2005 and 2013 which contributed to combined annual profits of over R32 billion in the 2013 financial year.
We are calling on the dirty banks of South Africa to:
- fully disclose their fossil fuel investments
- prioritise investment in renewable energy financing
- develop a true risk profile of fossil fuel investments
- support research on the true cost of fossil fuels to people and the environment, with particular focus on water pollution and access to water
- issue a public statement committing to stop financing future mining, refineries and power station projects in South Africa and across Africa
We can have a fossil free future with solar and wind energy providing locally-generated electricity for millions of people but it must start now with a change in investment. Banks, pension funds, universities and faith based organisations must commit to stop financing future projects, divest their existing investments and back renewable energy.