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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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Investors With $39.2 Trillion In Assets Pledge To Divest From Fossil Fuels

  • As many as 1,485 institutional investors, representing a massive $39.2 trillion of assets under management, have so far committed to at least some form of divestment from fossil fuels
  • Back in 2014, investors with just $52 billion assets under management had the same pledge to shift investments away from fossil fuels

As many as 1,485 institutional investors, representing a massive $39.2 trillion of assets under management, have so far committed to at least some form of divestment from fossil fuels, DivestInvest, a global network of individuals and organizations, said in a new report on Tuesday.

Since the divestment movement started in the early 2010s, it “has grown to become a major global influence on energy policy,” DivestInvest said.

Back in 2014, investors with just $52 billion assets under management had the same pledge to shift investments away from fossil fuels.

In recent years, the growth rate of divestment pledges has accelerated, DivestInvest said, noting that the first three years of the campaign netted 181 public commitments, while the most recent three years have seen 485 new commitments.

“These numbers reflect only known, public commitments to divestment. More institutions, to say nothing of individual investors, are almost certainly divesting in numbers beyond this, as the fossil fuel sector’s dominance of the stock market has shrunk considerably,” said DivestInvest’s report.

Among the notable divestment pledges stands out the Rockefeller Foundation, set up by John D. Rockefeller in 1913. In December 2020, the Rockefeller Foundation decided to divest from fossil fuels and not make any new investment in the industry. Funds for the creation of the $5-billion foundation initially came from the oil money of Rockefeller and the company Standard Oil he founded at the end of the 19th century.

Also in December 2020, the $226-billion New York State Common Retirement Fund said it was undertaking a review of all energy companies it is invested in, to assess their readiness for the energy transition and dump those considered riskiest in climate-related investment.

“One of the most important victories for the movement has been the financial elite’s gradual acceptance of the movement’s core financial arguments. Fossil fuels are a bad bet financially,” the authors of DivestInvest’s report wrote.

By Tsvetana Paraskova for Oilprice.com

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Leave a comment
  • Lee James on October 26 2021 said:
    A lot of the investor divestment decisions cited in the article were made during other times. Oil demand was wavering and the cost of bottling up a barrel of "tough" crude oil was really climbing. Until the last couple of years, investment in the oil industry had become undisciplined in the way that production cost was ignored. Free cash flow suffered mightily. The "Energy" sector was becoming unsustainable.

    Consistent with oil industry history, a lot has turned around and many investors will become bullish about oil once again.

    But I see this combination of private investors backing away from fossil fuel and heightened concern in the public sector that will attenuate the energy sector from over-shooting on the fossil side of the sector.

    Problems with our climate are simply becoming too noticeable, already. It's not just about grand kids anymore.

    As Norway is doing, we need a very well considered and deliberate transition away from burning fossil fuel. The only real issue is how quickly we transition.
  • Mike Berger on October 27 2021 said:
    Well, under investment in new wells causes price spikes...

    Every dollar not available for investment raises the rates paid for new investment. Trivial in the thousands... but in the millions? In the billions?

    Yeah. It adds up.

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