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Sep 24, 2015

Movement to divest from fossil fuels grows 50-fold in past year

More than 400 institutions with $2.6 tn under management now pledge to divest

The movement to divest from fossil fuels has grown 50-fold in the past year in terms of assets, with new commitments from CalPERS, the Norwegian government pension fund and Sweden’s AP2 National Pension Fund, according to a study by Arabella Advisors.

So far, 436 institutions and 2,040 individual investors with a combined $2.6 tn in assets or assets under management have committed to divest funds from fossil fuel companies, the firm says in a research note. That’s up from 181 institutions and 656 individuals with a combined $50 bn in assets in September last year.

‘The movement has grown beyond mission-driven institutions as large and influential organizations from new sectors are divesting their assets of fossil fuels,’ the report notes. ‘Large pension funds and private companies now account for more than 95 percent of the assets of those committed to divestment. Recent commitments from several large pension funds have contributed significantly to the growth in total assets of divesting institutions.’

Investors in the US are leading the movement, with a total of 1,723 investors pledging to divest, followed by Canada with 121, Australia with 98 and the UK with 63. In the rest of Europe, 70 investors have said they will divest from fossil fuel companies.

The study says pension funds now account for 56 percent of assets in the movement, followed by private companies with 37 percent, educational institutions with 5 percent, and healthcare institutions, municipalities, philanthropic foundations and others, with less than 1 percent each of the total.

Actor Leonardo DiCaprio, star of The wolf of Wall Street, has also pledged that his Leonardo DiCaprio Foundation will divest from fossil fuels in an announcement timed to coincide with the release of the Arabella Advisors study.