How to put your money where your morals are this Earth Day
As we celebrate the 50th anniversary of Earth Day to the best of our ability while quarantined in our homes, you may be wondering how you can help reduce the pollution that accelerates climate change and causes respiratory distress. One of the most powerful and immediate steps you can take without leaving the house is joining the movement of people around the world divesting from fossil fuels.
Last Thursday, to help individuals learn more about fossil fuel free investing, Environment America hosted a panel on Facebook Live, moderated by The New York Times contributor Tim Gray, and featuring Bill McKibben of 350.org and Leslie Samuelrich of Green Century Capital Management, our affiliated mutual fund company. (Green Century is owned by some of our sister organizations: state PIRGs and the Fund for the Public Interest.)
Even as global warming increases, oil, gas and coal companies are sticking to a business-as-usual approach. They plan to extract as much fossil fuel as they can profitably drill or mine for, despite scientists’ warnings that any hope of meeting the goals of the Paris Climate Accord hinges on keeping the vast majority of these fuels in the ground.
Even worse, the industry also is actively working to undercut progress on climate change. The five largest publicly-traded oil and gas companies spend nearly $200 million a year to block, delay, or undermine climate change policies.
Samuelrich explained how fossil fuel free investing can make a difference when other tactics can’t.
“It is about political pressure. It's one of the tools. It’s been a super effective one on fossil fuel companies,” said Samuelrich. “You can't change a company's core business through shareholder advocacy. It's just like getting Starbucks to stop serving coffee. It just doesn't happen. There's a big track record on how it's not happened, and investors have been trying. They've been trying for almost 30 years to get Exxon and Chevron and the other big oil and fracking companies to stop doing it and to actually transition. Unfortunately, it's just been unsuccessful.”
Several online sources define “social license” as “the ongoing acceptance of a company or industry's standard business practices and operating procedures by its employees, stakeholders, and the general public.” McKibben said long-hidden information exposed in recent years has led to a grassroots revocation of the fossil fuel industry’s social licence.
“The idea of a social license of a company facing constant questioning from every side about what it does, about people, about tarnishing its image so that people understand what it was about, that was really important,” McKibben said. “The thing that really turbocharged that halfway through the decade was the great investigative reporting that suddenly made it clear that the fossil fuel companies had known everything there was to know about climate change back in the 1980s, and then systematically lied about it.”
Can divestment really have an impact? Two recent studies say yes, it can. The first study found the movement is already having an impact on oil company share prices, which raises the industry’s capital costs, and in turn, makes exploration for and development of oil reserves more expensive. The second study suggests the movement has helped advance the debate on climate change.
McKibben added that, “Shell said last year in its annual report, that divestment had become a material risk to its business, which is good because Shell's business is a material risk to planet earth. When the coal companies lined up for their bailout a couple of weeks ago, they told the Congress that one of the reasons they needed it was because divestment had deprived them of any of their sources of capital. There just aren't funds willing to invest in these guys anymore.”
As more people look to put their money where their morals are, socially responsible investing has become more popular than ever. And given stay at home orders during the coronavirus pandemic, not only day traders are investing from home these days.
For more information about fossil fuel free investing, you can check out www.virtualearthday.org or http://environmentamerica.org/feature/ame/fossil-fuel-free.
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