Australia's institutions lead the way in divestment from fossil fuel

While our government may be lagging behind in the clean energy revolution, Australia holds the second highest rate of divestment from fossil fuel per capita in the world; coming second only to the U.S, according to a recent report distributed by global philanthropic corporation, Arabella Advisors.

The Global Fossil Fuel Divestment and Clean Energy Investment Movement report, released in December 2016, reports on $5 trillion in global assets that have been divested from fossil fuel companies, with pension funds and insurance companies representing the largest sector committed to divestment.

We spoke with leading author of the report, Ryan Strode of Arabella Advisors, who told us what surprised him most regarding the report findings, shared his thoughts on the implications of Trump's presidency on the movement and provided some examples of how divestment assets are being used to help disadvantaged communities to keep up with the transition into a clean energy future.

Q&A with Arabella Advisors' Ryan Strode

What has been the driving factor in the 100% increase in fossil fuel divestment in the last 15 months?

Our report found that the mounting financial and regulatory pressures on the industry, coupled with moral arguments for divesting, have helped to drive the rapid growth of the movement.

Fossil fuel divestment from September 2015 - December 2016
Source: Arabella Advisors

What was the most interesting or surprising factor that you found during research for this report?

Aside from the sheer size of the growth, I would say it's that fiduciary duty has flipped from an argument against divestment to an argument for divestment. The notion that if you are a mission-driven organization, investing in fossil fuels could be in conflict with your responsibility as a fiduciary is a compelling argument that has the potential to drive the next phase of growth.

What do you feel was behind the main push in taking the fossil fuel divestment movement from student groups and activist organisations in the U.S, to a global platform that sees many Australian companies now reconsidering their investment options?

The growth of the campaign globally is a natural extension of the work of the Beyond Fossil Fuels advocacy community, as well as the commitment by world leaders in the UN Paris Agreement to emissions targets. The work in the UK, Australia, and Asia is being driven by a wide range of advocates, just as it was in the United States.

With Donald Trump's initial attempts to derail the United States involvement with the Paris agreement in mind, what do you predict for America's future commitments towards divestment from fossil fuels?

With the United States' commitment to climate policy in question, we believe it will be more important than ever for civil society organizations to help capitalize a just, clean energy transition. As such, we see no signs that the movement is losing steam, and it should continue to serve as one of many tools that organizations can use to act on climate.

Can you provide any examples of the institutions that are using their portion of the $1.3 trillion in assets to assist those "poor and vulnerable communities that risk being left behind in the energy transition?"

The best examples include the Just Transition Fund, a project of the Appalachia Funders Network, and the Reinvest in Our Power network, which includes investments from the Chorus Foundation. More examples are listed on page 18 of the report.

How do you choose the people that sit on your committee when formulating these reports?

We look for representatives of the many different sectors involved in divestment campaigns, including faith, climate, municipal, student, and universities. We've also added experts from the climate finance and investment sectors. This inclusive group helps us set parameters around what commitments should be included. They also help us identify new commitments, as many of their groups are involved in divestment campaigns.

Do you think the rapid increase in renewable energy investments is occurring because clean energy is 'trendy' or are institutions and individuals really starting to sit up and take notice?

Investors have, for some time, seen clean energy has a tremendous market opportunity. In the past, investment was held down by antiquated policy and technology. Investors are increasingly turning to clean energy as more governments make meaningful commitments to a clean energy future, and costs continue to fall (reaching parity with fossil fuels in many parts of the world).

Related article: Australia leads way in fossil fuel divestment by Bill McKibben of 350.org.