‘Divestment’ is a socially motivated action. It refers to the removal of investments in a particular company or sector. Those divesting their finances are sending a message that their principles and values are no longer aligned with the activities of the company or industry in question.
Examples of divestment campaigns in the past include divestment from companies investing in the Apartheid regime of South Africa, as well as divestment from the tobacco and arms industries.
While they may not always have a big financial impact on the target industries – divestment campaigns can be very effective in damaging the reputation of these industries or companies – and drawing attention to the negative impact of their operations in the media, ultimately changing public opinion.
The global fossil fuel divestment movement is already one of the fastest growing movements in history.
As of March 2016 more than 500 institutions, with a value of over $3 trillion, have committed to divest from fossil fuels within five years.
Such institutions include major universities such as Oxford in the UK and Stanford in the US, to foundations like the Rockefeller Brothers Fund.
In Ireland, Maynooth University has become the first university to put in place a fossil free investment policy, and student-led divestment campaigns are active in Trinity College, the National University of Ireland, Galway, and Queens University Belfast.
Trócaire does not have investments. We do, however, have a pension fund for staff, which we have committed to divest from fossil fuels. Trócaire has also signed the “Europeans for Divest-Invest” pledge.
Related content: Why we must say no to fossil fuels
The Irish Government is investing your tax money in the fossil fuel industry and this has to stop. But you are a personal investor too.
In all likelihood, your bank and pension provider invests your savings and contributions in the fossil fuels industry.
There are a number of ‘socially responsible investment’ options now available on the market. Ask your bank or broker for available options.
If you have a savings account – ask your bank for details of how they invest the money you are saving. If you find that it is being invested in industries like the fossil fuel industry (or others you might disapprove of – arms or tobacco - for example) ask them if they have an ethical option available. If they do not, ask them why and if the answer is not satisfactory consider changing to another provider.
Trustees of pensions are tasked with ensuring the best return on investment for their members. Increasingly we are likely to see a natural move away from investment in fossil fuels as they begin to underperform due to external pressures like international emission reduction targets.
However, as it currently stands – the fossil fuel industry is still one of the most heavily invested in. And the longer this continues, the more damaging it will be.
The first thing to consider when looking to divest your pension is the type of pension involved. Is it part of a group work scheme, self-employed, or personal pension, for example?
Another question to consider is how the pension is set up. Are there options to select where the money is invested, does it simply follow an index, or does it invest in a number of funds and managed funds?
Once you have an answer to these questions, you’ll be in a better position to take action.
Contact your pension trustees or pension provider for details on your pension and to see where it is on divestment.
Most investments and pensions are invested in fossil fuels in some form. If you receive details of what funds the portfolio invests in, but you don’t know what companies these funds invest in, it might be worth looking at the fund breakdowns on the company’s website to see if they invest in fossil fuel companies. If there are no details on the website contact your pension provider to find out what companies the funds normally invests in.
Is there an ethical alternative you could move your pension to? If not, what is the stance of the Trustees on continued investment in the fossil fuel industry?
In terms of your options, you can either lobby your existing pension provider to divest from fossil fuels, or consider seeking out and moving to a more ethical pension fund.
There are a number of funds now available that invest solely in renewable energy for example.
The Guardian – A Beginner’s Guide to Divestment (June 2015)
This article is a great starter for anyone looking to divest or start up a campaign.
This free online tool takes your list of securities in your portfolio and replaces all the fossil fuel ones with non-fossil fuel securities. It then shows how much more money the portfolio would have made if it invested in the non-fossil fuel alternatives three years ago.
Fossil Free Funds
This website allows you to put in the name of any mutual funds in your portfolio and find out if they invest in fossil fuels.
Fossil Free Index Fact Sheets
This website shows the charts for some of the main investment indexes and contrasts them with their fossil-free alternatives. It clearly shows how that the fossil free indexes would have been the better investment.
If you do a search on this website for the fossil free factsheet, it shows how the fossil free version is beating the normal MSCI index.
Fossil Fuel Free Europe Resources
This page of the Go Fossil Free website has an extensive collection of everything you could possibly need to start a divestment campaign.