Activists see progress in convincing groups to divest from fossil fuels

The movement to divest from fossil fuels is catching fire.

Four universities and 10 U.S. cities, including Seattle and San Francisco, have announced plans to divest their holdings in corporations that profit from the extraction of global warming fuels, especially oil and coal. But it appears most big environmental organizations have yet to follow suit. Groups including The Nature Conservancy, the World Wildlife Fund and Conservation International invest part of their endowments in the very fossil fuel industries that are linked to climate change.

Dan Apfel, executive director of the Responsible Endowments Coalition, said endowments typically work with investment advisors to choose stocks and other investments that perform strongly in the market.

“They try and make returns in order that they have more money to implement their mission in the future,” he said.

Fossil fuel stocks make up about 13 percent of the U.S. and global equity markets. Apfel estimates that green groups like have a similar portion of their assets in fossil fuels.

Some groups like The Nature Conservancy, with about $1 billion in assets, openly accept funds from companies like BP, Chevron, and Exxon. That, Apfel said, is a little different. It’s one thing, he explained, to take money that’s already been earned — but another to invest in the company and effectively bet on its future successes.

“All investors want their investments to perform well, but for these investments to perform well, that really means that more fossil fuels need to get burned, and that’s really inimical to the mission of the environmental organization,” he said. 

A typical person with investments in a mutual fund may be invested in fossil fuels and might not even be aware. But when it comes to groups with large endowments, it’s extremely unlikely they don’t know where their money is being invested, Apfel said.

“We really believe that once you know you have the obligation to do something — and I think most of these organizations already knew, but if they didn’t know before this divestment campaign, they definitely know now,” he said.

Apfel said organizations and individuals should be sensitive to what they’re invested in.

“You want to go out and find managers that don’t invest in fossil fuels and ideally are investing in the future. So, really are investing in the solutions to climate change, to mitigate climate change,” Apfel explained. “It’s really the most powerful statement an investor can make with their money.”

He said his coalition encourages colleges and universities to invest five percent of their endowments in solutions to climate change.

But Apfel says it just makes good business sense. Fossil fuel companies are largely valued based on their proven reserves — but burning them could lead to climate catastrophe. So either way, he said, investors in fossil fuels will lose.

“Either we’re going to burn those reserves and global temperatures are going to rise way more than two degrees, or we’re going to have to keep them in the ground, and that means that fossil fuel companies are overvalued,” he said.

Rather, Apfel said, invest in the companies that will power tomorrow.

“If we can’t invest in our future, we really shouldn’t be investing at all,” he added.