Impact Investing and the “New Green Industrial Revolution”: How to Stop Climate Change Through the Divest-Invest Movement

Abstract

The Divest-Invest Philanthropy defines the concept of Divest-Invest as investors pledging, over 5 years, to sell holdings of fossil fuel shares and investing instead in climate solutions, such as centralized and distributed renewable energy, clean tech, sustainable water and food projects, climate justice programs that bolster community ownership in the new energy economy, resilient infrastructure, smart cities and energy efficiency. The first divestment campaigns had their origin in the United States. The Divest-Invest Philanthropy was launched in 2011. The movement began on college campuses where students demanded that their college endowments divest from energy sources that harmed the climate. Not all movements had put a focus on fossil fuels in general, some only targeted coal. Students' campaigns argued that institutions of higher learning should not be supporting or profiting from industries that undercut the climate. Aside from the moral argument the economic logic was also powerful: coal had been in a steady decline. As a result, several dozen active coal divestment campaigns had started within a year across the USA. The publication of American environmentalist Bill McKibben's article "Global Warming's Terrifying New Math" in the Rolling Stone magazine in 2012 gave the divestment movement a real push forward. In his article, McKibben has called for full fossil fuel divestments by colleges. He linked the ethical side of divestment with the financial risks of the so called "stranded assets" laid out by the Carbon Tracker