Five years ago, the idea that investments in fossil fuel companies were morally or financially problematic was all but unheard of. But an argument started to take shape on US university campuses — that with more coal, oil and gas in existing reserves than can ever be burned while keeping climate change under control, it is ethical and economic madness to spend billions looking for more.
Fast forward to today and the argument has rocketed into mainstream financial thinking. It was revealed on Monday that investors worth more than $5tn have now committed to dump their fossil fuel stocks, and more than 80% of that is professional funds run for profit. Furthermore, this risk of a “carbon bubble” is now being taken seriously at the highest level, including by the Bank of England, World Bank and the G20’s financial stability board.
As Lou Allstadt, a former senior executive at Mobil Oil, puts it: “Divestment is speeding up the clock on the final accounting that will show fossil fuels are out and clean energy is in.”
