How divestment began

This content forms part of the DivestInvest guide.

In April 2016, Ellen Dorsey, Executive Director of Wallace Global Fund, accepted the inaugural Mandela-Machel Award for Brave Philanthropy on behalf of 140 foundations, family offices and charities of DivestInvest Philanthropy. Wallace Global Fund has played a key role in the funding, organising and growth of the global DivestInvest movement, and has led the campaign in the philanthropic sector. Ellen Dorsey was herself an activist in the anti-Apartheid movement, where she saw firsthand the power of divestment as a driver of fundamental social and political change. Following is an extract from her acceptance speech where she provided a compelling description of how the movement began.

“In 2011, hopes for a solution to climate change were at a 20 year low. The UN climate conference held in Copenhagen in 2009 had ended without meaningful agreement and efforts to pass a comprehensive climate bill collapsed in the US Senate in 2010. The combination of setbacks left a demoralised climate advocacy community adrift in its wake. Into this vacuum stepped Fossil Fuel Divestment. A meeting of student groups held in Washington in early June 2011 hammered out the first plan for a series of campus campaigns calling on universities to divest their endowments from coal, six of which were launched the following August. By the following spring, divestment campaigns had spread to an estimated 40 campuses. But they had yet to get their biggest boost.”

“In summer of 2012, author and climate activist Bill McKibben published a landmark article in Rolling Stone magazine calling for fossil-wide divestment and linking it to the ‘Carbon Bubble’ first reported by the Carbon Tracker Initiative. The basic premise being that companies can’t burn the vast majority of the reserves they have on their books – it is a prescription for planetary destruction. They would have to leave it in the ground. Those reserves amount to ‘stranded assets’ for investors. The ethical case to divest was bolstered by a powerful financial analysis.”

In a short space of time, the movement has spread from college campuses in the United States to local councils, cities, religious and health institutions, foundations, unions and pension funds across the world. By November 2016, 688 institutions with over US$5.2 trillion worth of assets have committed to DivestInvest. Those organisations include:

Foundation158 (23%)12 (9%)
Faith based158 (23%)19 (15%)
Government117 (17%)27 (20%)
Education96 (14%)6 (5%)
Pension funds82 (12%)9 (7%)
Self managed super fundsNot applicable49 (37%)
For profit organisations22 (3%)3 (2%)
Non-government organisations41 (6%)4 (3%)
Other14 (2%)2 (1.5%)

Table 1: Divesting organisation type, number and percentage.

Divestment gathers speed

Allianz makes a €2 trillion statement about coal divestment
Sydney Morning Herald, 24 November 2015
Allianz is the latest big company turning its back on coal, with the German financial services giant vowing to offload significant coal holdings within six months.

German broadcaster ZDF quoted Allianz chief investment officer, Andreas Gruber, as vowing to shift investments out of coal and into renewables. “We
will no longer invest in mining companies and utilities that generate more than 30 per cent of their sales or energy creation from coal.” According to reports by Reuters, the change will be conducted over a six-month period and will see investment in wind doubled to 4 billion euros.