Switzer Foundation Divestment Update: Fossil fuel divestment is complete. Now what?
As of May 2016, the Switzer Foundation has fully (99.98%) divested from the top 200 fossil fuel companies named in the Carbon Underground 200 – the public listing of the top 200 companies whose revenues are based on fossil fuel extraction and development. The principle behind the divestment movement is that investors can apply pressure to those companies whose reserves, if developed, would cause carbon emissions to exceed the limit necessary to forestall global warming. If companies agree to limits on global temperature rise, then they must keep much of these fossil fuel reserves in the ground, thereby rendering many of the assets on their balance sheets as “stranded assets”. Divestment sends a message that these investments are seen as risky for overvaluing assets that should not be developed.
Beginning in September 2014, the Switzer Foundation joined dozens of other funders to lead this charge. Divest-Invest Philanthropy now includes over 140 Foundations and endowments representing $12 billion in assets. Divest-Invest Philanthropy also recently won the 2016 Nelson Mandela-Graça Machel Innovation Award for Brave Philanthropy from CIVICUS for their commitment to divest from fossil fuels and invest in climate solutions. We are pleased that we could complete our divestment process in time for our 30th anniversary celebrations this past spring!
Our small act of divestment (our socially responsible screening had already limited our exposure to oil and gas development) is nonetheless a large step for the environmental movement. The future challenge that remains for us is the investment side of the commitment. How do we invest in a clean energy future? How do we sustain returns to maintain our programs? We know that many Switzer Fellows are at the forefront of innovation and networks to support this shift, and we look forward to new partnerships and shared learning with them to till this new ground and plant seeds for a cleaner future.