I remember well the first institution to announce it was divesting from fossil fuel. It was 2012 and I was on the second week of a grueling tour across the US trying to spark a movement. Our roadshow had been playing to packed houses down the west coast, and we'd crossed the continent to Portland, Maine. As a raucous crowd jammed the biggest theater in town, a physicist named Stephen Mulkey took the mic. He was at the time president of the tiny Unity College in the state's rural interior, and he announced that over the weekend its trustees had voted to sell their shares in coal, oil and gas companies. "The time is long overdue for all investors to take a hard look at the consequences of supporting an industry that persists in destructive practices," he said.
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As time went on, though, it became clear that divestment was also squeezing the industry. Peabody, the world's biggest coal company, announced plans for bankruptcy in 2016; on the list of reasons for its problems, it counted the divestment movement, which was making it hard to raise capital. Indeed, just a few weeks ago analysts at that radical collective Goldman Sachs said the "divestment movement has been a key driver of the coal sector's 60% de-rating over the past five years."
Now the contagion seems to be spreading to the oil and gas sector, where Shell announced earlier this year that divestment should be considered a "material risk" to its business. That's how oil companies across the world are treating it -- in the US, petroleum producers have set up a website designed to discredit divestment, and for a while had me under round-the-clock public surveillance. The pressure is not preventing anyone from acting: when Yale arrested 48 brave students who were occupying its investment offices last week, they left chanting: "We'll be back."
Divestment by itself is not going to win the climate fight. But by weakening -- reputationally and financially -- those players that are determined to stick to business as usual, it's one crucial part of a broader strategy. The Carbon Tracker initiative in London published the first report laying out the fact that the fossil fuel industry has five times more carbon in its reserves than any climate scientist thinks is safe. And with activists marching and going to jail, phrases such as "stranded assets" were soon appearing in the mouths of everyone from hedge fund managers to the governor of the Bank of England.
Bill McKibben is the author of a dozen books, including The End of Nature and Deep Economy: The Wealth of Communities and the Durable Future. A former staff writer for The New Yorker, he writes regularly for Harper's, The Atlantic Monthly, and The (more...)