Why divest?
Fossil fuel investment is no longer desirable - ethically and financially.
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Ethics
Fossil fuels comprise 80 per cent of current global primary energy demand and are the source of approximately two thirds of global CO2 emissions.
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Scientists warn we must cut our carbon emissions by 45% by 2030 to avoid the most deadly, irreversible impacts of climate change. ​If fossil fuel companies continue to grow and increasingly profit, we will not reach this goal.
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Assuming the current share of fossil fuels is maintained and energy demand nearly doubles by 2050, emissions will greatly surpass the amount of carbon that can be emitted if the global average temperature rise is to be limited to 2oC. That level of emissions would have disastrous climate consequences for the planet.
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No major oil and gas company has yet released a climate pledge or sustainability plan that meets the bare minimum criteria for alignment with the Paris Agreement
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On Oil and Gas Companies Climate Plans: http://priceofoil.org/content/uploads/2020/09/OCI-Big-Oil-Reality-Check-vF.pdf
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Ethics
Financials
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Fossil fuels used to be a safe, dependable investment, but that is no longer the case. They have been the worst performing industry on Wall Street for a decade.
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In the past 6 years, over 500 U.S. oil and gas producers have filed for bankruptcy, revealing deep debt and plummeting returns to the portfolios of investors.
BP, Shell, Conoco Philips, and Marathon Oil have all netted double-digit losses in their stock prices since 2016. As of January 2021, shares of ExxonMobil have lost 47% of their value in the past five years.
As of 2019, state workers in California and Colorado lost a combined $19 billion in retirement funds over 10 years by remaining invested in fossil fuel assets. For California public school teachers, losses amounted to over $5,000 per person.
Many senior figures and institutions in the financial world, including the World Bank, Bank of England, HSBC, Goldman Sachs, and Standard and Poor’s, have warned that only a fraction of known fossil fuel reserves can be safely burned and that the remainder could plummet in value, posing huge risks to investors.
In 2015, HSBC advised its clients to divest from fossil fuels, cautioning that investors who fail to get out of fossil fuels “may one day be seen to be late movers, on ‘the wrong side of history.” HSBC warned that 40-60% of the market capitalization of oil and gas companies was at risk from the carbon bubble.
The chief investment officers for the University of California, Jagdeep Singh Bachher and Richard Sherman, agree: “We believe hanging on to fossil fuel assets is a financial risk,” they said, and that they pose “a long-term risk to generating strong returns for UC’s diversified portfolios.”
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