As oil prices bottom out and fossil fuels no longer offer strong returns, investment dollars are starting to move to renewable energy
Divestment – the decision to voluntarily reduce one’s fossil fuel investments – has been a hot button topic of discussion since 2011, when university students began calling on their institutions to remove fossil fuels from their portfolios. Divestment arguments have often focused on the morality of investments, but the economic value of divestment has recently become hard to ignore.
In January, portfolio planner Advisor Partners reported that, between 2014 and 2015, New York City’s biggest pension fund lost $135m because of its fossil fuel holdings. And, earlier this month, Market Forces, an activist group that works in environmental finance, reported that fossil fuel investments cost 15 of Australia’s top funds an estimated $5.6bn. On average, this cost each member of these funds $1,109.
Related: Sustainable investing: are companies finally moving money away from fossil fuels?