Fossil-free investments outperform conventional stocks, quashing divestment doubts

Intro

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.

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MT @Silvio_Marcacci: North American fossil-fuel free index outperforms traditional portfolios. Divestment, ya’ll. http://ow.ly/JcJ1R

Key Points

  • 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.

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Key Quote

  • “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

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