Kicking oil companies where it hurts: How to make fossil fuel divestment smarter

The divestment movement has its limits. But with a new strategy, it can at least be more effective.

Oil pump.
(Image credit: (David McNew/Getty Images))

One of the most focused endeavors of the broader fight against climate change is the movement to demand divestment from fossil fuel companies. Specifically focused on institutional investors, divestment activists have been pressuring pension funds, university endowments, and others with significant holdings in the oil and gas sector to sell those shares (or bonds). This is a multi-pronged effort to raise awareness about how these industries fuel climate change, to divert that capital to low- and zero-carbon resources, and to deter future investment in oil and gas exploration.

As part of that campaign, February 13 and 14 have been designated Global Divestment Day(s), with hundreds of events organized by activist groups. The Norwegian sovereign wealth fund — the largest in the world, built from the country's oil and gas wealth — has announced it would sell holdings in coal and mining companies that, in its estimation, represent an unacceptably high degree of climate-related investment risk. The fossil fuel companies under target are pushing back, with ad campaigns focused on the important role their products play in the global economy.

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Neil Bhatiya

Neil Bhatiya is a Policy Associate at The Century Foundation, where he works on issues related to U.S. foreign policy, with a specific focus on South Asia and climate change.