Nearly fifteen hundred institutional investors around the globe have now publicly pledged to divest from fossil fuels, a report from the Institute for Energy Economics and Financial Analysis, Stand.earth, C40, and Wallace Global Fund finds.

According to the report, Invest-Divest 2021: A Decade of Progress Towards a Just Climate Future (39 pages, PDF), in the ten years since the divest-invest movement was launched as a student-driven effort on college campuses, 1,485 institutions with assets totaling over $39.2 trillion — more than the GDPs of the United States and China combined — have publicly committed to fossil fuel divestment in some form. The movement's rate of growth has been accelerating, with 485 pledges announced in the last three years, and the philanthropic sector has stepped up its commitments. The Divest-Invest Philanthropy coalition, launched in 2014 with seventeen foundations with combined assets of nearly $2 billion pledging to divest from all fossil fuels and investing at least 5 percent of their portfolios in climate solutions, now includes 192 foundations and family funds with assets totaling more than $125 billion.

As a result, the movement is now helping to hold fossil fuel companies accountable for the true cost of their unregulated carbon pollution, the report's authors note, with oil companies admitting that the movement is raising costs and affecting profits and access to capital. Moreover, early adopters of divestment strategies are reporting positive financial results, providing proof that divestment is a sound financial strategy.

The pace of investment in renewable energy systems, and sustainable climate solutions more broadly, however, is "woefully insufficient," the report finds. To support a tripling of investments in renewable energy by 2030 that the International Energy Agency has called for, and to ensure a just transition to a green economy, the authors write, mission-driven institutions must lead the way for the larger investment community. To that end, the divest-invest movement must urge all institutional investors to make an immediate public commitment to fully divest from and stop all financing of coal, oil, and gas companies and assets; immediately move to invest a minimum of 5 percent of their assets — and 10 percent by 2030 — in climate solutions, including renewable energy systems, universal energy access, and a just transition for communities and workers; and adopt "net zero plans" that both immediately cut investments in fossil fuels and ensure that all other assets in their portfolio develop transition plans that halve absolute emissions by 2030.

"The battle to wind down the fossil fuel industry proceeds on two tracks: the political (where this week may or may not see action on big climate legislation from Congress) and the financial. Those tracks cross regularly — the influence of money in politics is clear on energy legislation — and when we can weaken the biggest opponents of climate action, everything gets easier," wrote Bill McKibben, professor of environmental studies at Middlebury College and co-founder of 350.org — which manages a new database of divestment commitments with Stand.earth — in a New York Times opinion piece. "Divestment has helped rub much of the shine off what was once the planet's dominant industry. If money talks, $40 trillion makes a lot of noise."

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