Divestment: Money Talks


The burning of fossil fuels is one of the primary causes of climate change. Burning fossil fuels produces carbon dioxide, which traps heat in the atmosphere and destabilizes our climate. In addition to causing climate change, the fossil fuel industry contributes to land degradation and water pollution. Although we know that this is bad for human health and the environment, our economy is heavily intertwined with the fossil fuel industry. Not only does the fossil fuel industry provide over one million jobs, but many individuals and institutions are invested in it. 

To invest means to allocate money towards something with the expectation that you will benefit from it long-term. Around the world, many universities rely on investments to increase their endowment, which is the university’s pool of financial assets that they use to support the education of its students. The fossil fuel industry makes a lot of money, which is attractive to investors such as universities. However, investing in an institution or company supports both their products and their politics. Therefore, through these investments, universities are directly financially supporting the fossil fuel industry. 


This has led to a growing movement called fossil fuel divestment. The movement began in 2010 when students on campuses across the United States began asking their universities and colleges to divest from fossil fuels and reinvest their endowments to better reflect their values.

Definition of Divestment

Divestment is the process of selling investments, essentially un-investing. Divestment includes selling divisions, which is a part of a company that represents a different product line, and selling subsidiary assets, which is the property of a business that is at least 50 percent owned by the primary company. 

Divestment can be used to satisfy financial, political, or social goals. Social justice groups frequently call for public institutions to divest from large corporations or oppressive systems and reinvest in grassroots organizations. Proponents of fossil fuel divestment call for institutions to reinvest in clean energy alternatives and the communities most impacted by climate change. In 2015, divestment from fossil fuels surpassed previous divestment movements, becoming the fastest-growing divestment movement in history. 

The History

Divestment has been used throughout history to withdraw support from large industries that do not align with social goals. Notable movements include ongoing divestment from the tobacco industry, and the United States’ withdrawal of support from South Africa to end apartheid, a system of racial segregation, in the 1980s. Since 2014, the movement to divest from fossil fuels has grown in universities as students call on their administrations to reinvest their endowments in clean energy alternatives and socially responsible businesses. Although some critics argue that divesting does not place enough of a financial burden on the fossil fuel industry to prompt the energy industry to change, proponents of the movement argue that it is an important moral and political call to action. As of 2020, over 1,000 institutions have committed to divesting from fossil fuels. 

Not all divestments are made with social change in mind. Divestment can also be used to get out of investments that are losing money and to invest in more lucrative options. 

Applying It

The fossil fuel divestment movement is a great example of grassroots organizing in action. What began as a small student-organized campus protest against fossil fuels has turned into an international movement, and it continues to grow. The success of the campaign to divest from fossil fuels proves the efficacy of local and student-led movements.

Think Further

  1. How often do you consider the environmental effects of the products you consume? Do your values affect where you choose to shop?
  2. In what other ways does money influence politics?
  3. What are some examples of environmentally-friendly investments?


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Learn More

  1. Denchak, Melissa. “Fossil Fuels: The Dirty Facts.” nrdc. 2018. Web. https://www.nrdc.org/stories/fossil-fuels-dirty-facts.
  2. Ganti, Akhilesh. “Divestment.” Investopedia. 2019. Web. https://www.investopedia.com/terms/d/divestment.asp. 
  3. Snow, Bill. “M&A Reasons to Sell: Divest a Division or Product Line.” dummies. Web. https://www.dummies.com/business/corporate-finance/mergers-and-acquisitions/ma-reasons-to-sell-divest-a-division-or-product-line/. 
  4. Vaughan, Adam. “Fossil Fuel Divestment: A Brief History.” The Guardian. 2014. Web. https://www.theguardian.com/environment/2014/oct/08/fossil-fuel-divestment-a-brief-history. 
  5. “2017 U.S. Energy and Employment Report.” 2017. https://www.energy.gov/downloads/2017-us-energy-and-employment-report.