Divestment 101

What is divestment?

Divestment is the opposite of investment and it means to take money out of certain industries, particularly industries with adverse sociopolitical or environmental impacts, like the fossil fuel industry. The fossil fuel divestment movement is a global movement asking institutions such as universities and governments to remove their investments from the fossil fuel industry. Divestment movements have a successful history at universities, starting with the movement to divest from South African apartheid in the 1980s.

Mount Allison University directly supports the top 200 fossil fuel companies with over $8 million.

Why divest?

Fossil fuel combustion is the leading cause of increasing atmospheric CO2 concentrations
Time is running out to curb our emissions, so it is important to make the transition away from fossil fuel reliance as soon as possible
More and more, economists are realizing that fossil fuels are not a sustainable investment in the long term.
Divestment is about more than just the ecological side of the climate crisis
- The term “environmental justice” relates to the intersection of social justice and the climate crisis.
- Environmental activism must centre the voices of those most affected and must seek to remedy the injustices caused by the fossil fuel industry and by those in power who have failed to protect people.
A focus on systems rather than individual actions
- Divestment looks to dismantle the fossil fuel industry as a whole, because even if we all make individual changes, the biggest culprits of the climate crisis are large fossil fuel corporations and governments that have failed to hold these corporations accountable.
Green reinvestment: divesting from the fossil fuel industry provides more opportunities to support sustainable industries such as renewable energy

How would divestment work

Assessment: Assessment would involve determining the extent of the portfolio involved in fossil fuel companies, with the Carbon Underground 200 list as a starting point. Many tools exist to help with assessments including Fossil Free Funds and Earth Equity Advisor's free Impact-X tool.

Thresholds of Exclusion: Define thresholds for exclusion that would quantify the amount of involvement in the fossil fuel industry would require divesting from that company, which would start with the top 200. Services like Green Century could advise in this process, thresholds do not have to built from scratch.

Divestment: Freeze new investments in fossil fuel companies. Sell holdings in top 200 fossil fuel companies as soon as possible. Over the next few years, sell remaining fossil fuel stakes by broadening exclusion thresholds in phases. If relevant, commingled funded would need to be unwound.

Reinvestment: Reinvest in sustainable and renewable industries to promote environmental sustainability. Potential focuses of reinvestments could be: energy efficiency, power generation, sustainable agriculture, transportation, water, or sustainable design. A number of preexisting fossil free funds exist that would allow for sustainable investments while maintaining portfolio diversification and stability. Potential funds include Green Century Balanced Fund, Trillium: Fossil Free Core, Sustainable Opportunities, and MD Fossil Free Funds.