Editor’s note: This commentary is by Dan Quinlan, of Burlington, who is the chair of the VT Climate and Health Alliance and the creator of divestor.org.
The news that the University of Vermont is divesting from fossil fuels is hugely welcome news. Kudos to the UVM board of trustees, and the UVM students (and many others) who made this happen. The moral argument about why we need to do everything we can to protect our kids and vulnerable Vermonters is obvious. The great thing about divestment is that it’s also the smart thing to do investment-wise.
The UVM announcement might get folks thinking about their own investments. Here are four good reasons why we should all follow UVM’s move:
— Divestment means not benefiting from the damage being caused by the fossil fuel industry. Every dollar earned from an investment in the fossil fuel industry represents a benefit derived from the continued growth of the industry that is the core driver of carbon pollution and of rapidly growing hardship across the planet. As the work of the Vermont Department of Health is showing us, Vermont will not be immune from these effects.
— Divestment sends a clear, unequivocal message. This is about numbers – not in dollars – but in people. If millions of people remove their financial interest in the big fossil fuel companies, that sends a clear message to governments, legislators, and the global business community. It also signals investor interest in fast growing parts of the new energy economy – enabling new cleaner ways to generate energy and improving the energy efficiency of the things people use every day.
— Divestment is a reminder. The more that each of us pays attention to all the ways in which energy plays into our lives (including our investments), the more likely we will move ourselves and our families toward generating and consuming energy in a sustainable and socially responsible way.
— Divestment provides reinvestment opportunities. The clean energy economy has been growing exponentially as fossil fuel sectors like coal become bad investments. Whether your investment style is aggressive and “growth” oriented, or conservative and “income” oriented, the emerging new energy economy provides compelling investment opportunities. Take note of Joe Biden’s recent announcement of a $2 trillion clean energy plan.
Here’s one way to think about it. The goal of the divestment movement is to pull support away from the major fossil fuel companies and shine a big bright light on the nonexistent (or, depending on the country, woefully ineffective or just stupid) policy response to climate change. The major players in the fossil fuel business are big – really big. ExxonMobil’s market “cap” is currently about $190 billion. (“Cap” is short for capitalization – the dollar figure you get when you multiply the number of a company’s shares by the share price.)
The most straightforward and easy investment move is to stop investing in large cap stock mutual or Exchange Traded Funds (ETF). Instead, put your money into small and mid-cap funds. There are hundreds of diversified small and mid-cap funds to pick from. Most brokerage sites and personal finance sites have areas where you can easily compare small, medium and large cap funds for yourself. You’ll find that small and medium cap funds perform just as well, if not better than large cap funds over time.
Some people want to go further – no fossil fuel companies at all. OK – also not hard. In about five seconds you can check on whether any of the mutual or ETF funds you’re considering hold fossil fuel company stocks. Type in the fund’s ticker symbol at fossilfreefunds.org, and you’ll get your answer.
As Joanna Macy has said, “Our earth is not a supply house and a sewer. It is our larger body. We breathe it. We taste it. We are it.” The World Health Organization has declared that climate change is the 21st century’s primary threat to human health. The number of angles is gigantic, and there are lots of interconnected loops and complex feedback paths.
This Center for Disease Control and Prevention website concisely illustrates why medical and health professionals are so worried about all this – including what is happening, and will happen, here at home in Vermont. These problems first hit those least able to fight the effects: the elderly, the poor, the chronically ill, and children.
Investment advisers like to say that your investment decisions should allow you to sleep at night. If the idea that betting against the planet and our kids’ future keeps you up at night, follow UVM’s example and divest. It’s easy. And your investments are going to do better, too. (BTW: if your investment adviser says that divesting is risky or too hard, it’s time to find an investment adviser who’s paying attention.)
