The case for divestment is now stronger than ever, with new information showing that fossil-free indexes have outperformed conventional indexes over the last five years. The data, from the London-based FTSE Group, reveal that FTSE’s North American fossil fuel free index beat the conventional benchmark index while also demonstrating lower rates of volatility. This news comes on the heels of an announcement that a fossil-free version of the S&P 500 outperformed the original index by 1.5% last year. While past performance is not a guaranteed predictor of future success, these trends show that divesting from fossil fuels makes perfect financial sense. As the burgeoning divestment movement gains more traction, fossil fuel backers are trying their hardest to ridicule it as “feel-good folly.” But the truth is that the divestment movement is successfully challenging the polluting fossil fuel industry and protecting investors from risky investments. With nearly 200 cities, universities, and other institutions having sold off $50 billion of fossil fuel stock, the real impact of divestment cannot be ignored.
- Fossil free indexes are outperforming conventional ones, dispelling the last lingering doubts about divestment’s financial impact. Last year, a fossil free version of the S&P 500 handily outperformed the original by 1.5%. Now, new data from the FTSE Group show that fossil-free indexes also have staying power. Over a five-year period from January 2010 to January 2015, FTSE’s North American fossil fuel free index beat the conventional benchmark index, demonstrating once again that a fossil-free strategy can make perfect financial sense.
- Fossil fuel investments are risky for investors and for the planet. Experts have championed divestment as an astute move that makes financial and environmental sense. Institutions moving away from dirty energies are heeding the warnings from the world’s leading scientists that large swaths of known fossil fuels must stay in the ground to avoid the worst impacts of climate change. As oil prices precipitously drop and the coal industry continues its long decline, continued investment in such fuels poses a significant risk to people, planet, and profits.
- What started with a few US universities has grown to over 500 campaigns at universities, cities, churches, banks, pension funds and other institutions around the world. To date, more than 180 institutions with a combined asset size of more than $50 billion have divested, rattling the movement’s opponents in the coal and oil lobbies. In the most high profile announcement to date, Norway’s Sovereign wealth fund—the richest in the world—said it had ended investment in 40 coal companies.
- Divestment outperforms conventional portfolios for past 5 years (NRDC Switchboard)
- Fossil-free indexes show strong performance as climate concerns grow (TckTckTck)
- Divestment movement has more small investors wanting fossil-free portfolios (Inside Climate News)
Tools & Resources
- Five year data: Developed ex Fossil Fuels Index Series (FTSE Group)
- Overview: Developed ex Fossil Fuel Index Series (FTSE Group)
- Blog: Some observations on Global Divestment Day 2015 (Fossil Free Indexes)
List: The Carbon Underground 2015: The world’s top 200 public companies ranked by the carbon content of their fossil fuel reserves (Fossil Free Indexes)
- Report: The green light report: Resilient portfolios in an uncertain world (ShareAction)
- Report: Unburnable carbon (Carbon Tracker)
Report: Stranded assets and the fossil fuel divestment campaign (University of Oxford)
- Briefing: A step-by-step guide to divestment (350.org)
- Briefing: Debunking myths about fossil fuel divestment (Go Fossil Free)
- Website: Divest-Invest
- Five-Year Performance – Total Return (FTSE Group)
- “The only folly is a failure to see where continued investment in fossil fuels is taking us—into an uncertain future of weather extremes, which we’re already getting a taste of now. Storms, droughts, and flooding are expected to become more frequent and severe as the climate warms; sea levels are rising, swamping low-lying lands. The Pentagon sees climate change as a national security threat.” – Peter Lehner, Executive Director of the Natural Resources Defense Council
Related Tree Alerts
- Campaigners up pressure on investors to ditch fossil fuels
- Investors urge big oil to face up to climate risk
- Fossil free index outperforms the S&P 500
- Momentum gathers around climate summit but more needed from world leaders
- Divestment goes mainstream as major funds kick the fossil fuel habit
- RT @Agent350: Fossil free portfolios outperformed conventional portfolios for the past 5 years: http://bit.ly/1ANx5Tz #divest
- RT @BarrySchachter: Fossil fuel divestment: don’t muddy the discussion with misleading data http://bit.ly/17BZAbB via @fossilfreeindxs
- RT @chrisito88: Take the time to understand the #divestment debate and why the strategy could make sense for you. http://fossilfreeindexes.com/research/the-carbon-underground/