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Divestment at Scale

On the one year anniversary of the Paris climate agreement, Arabella Advisors released a report announcing that individuals and institutions controlling more than $5 trillion in assets committed to divesting from fossil fuels. Divestment, a movement that got its start on college campuses, has quickly evolved from one based in environmental concern to one based in fiduciary duty. This is the result of recent fossil fuel industry weaknesses coupled with the rise in desirability and profitability of renewable energy. 

Even the former executive vice president of Mobil Oil, Lou Allstadt, confirmed the prudence of divestment saying, “The oil and gas industry is currently experiencing an unprecedented level of negative factors — from reduced profits to increased borrowing to pay dividends — while the costs of solar, wind and batteries continue to fall.”

The question of whether or not these significant public and private commitments will influence the energy policy of the Trump administration remains. So far leaders who were in Paris to sign the global climate deal are standing firm. So while investment in the US may be more fragile, China, India, Germany, the UK and the EU have all reaffirmed their promise to curb CO2 emissions. 

In the US, regardless of the White House support for fossil fuels, moves have been made to consolidate the low-carbon economy in a sign that fossil fuel companies will still face a battle over CO2 emissions.  And for those who are betting on California, the Governor has reinforced his investment commitment to curbing climate change.

Sources:

https://mobile.nytimes.com/2016/12/12/science/investment-funds-worth-tri...

http://divestinvest.org/2016-report/

 

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