Our Week 4 challenge is a little more complex though: divest yourself and your pension plan! If you’re wondering why this is a good idea, this article from Bill McKibben is a great place to start. Divestment has a small, but real, impact on fossil fuel companies ability to operate. But this effect snowballs as the movement grows! And it also helps remove their ‘social license to operate’ — something that really does scare the crap out of them and motivate better behaviour.
If you have a financial adviser, divesting yourself should amount to an annoying, but manageable phone call.
Your adviser may push back a little saying it is an unnecessary risk — however, this may actually hide the fact that it is extra work for them that they don’t want to do. But they will have to get used to it because this movement is growing and if they do the research now, they will be able to support others and even attract new clients. If they really insist it’s a bad investment, show them this chart.
Fossil fuel investments have declined or barely budged during one of the greatest bull markets of all time! Read more here.
To make the change yourself, you will, unfortunately, probably have to sell most generic mutual funds, especially those with Canadian content. Here is a list of mutual funds you might invest in instead. Of course, we aren’t telling you to put your money into mutual funds if it isn’t already — ETFs and direct stock investments have lower management fees. In fact, it should come as no surprise to you that we aren’t financial advisors at all. If you manage your own investments, you’re a step ahead of Myrtle and I, and our only advice here is that you should find a way to divest that works for you. And we aren’t alone in this — Larry Fink, the CEO of Blackrock, who manages more money than almost anyone else in the world (the assets under his management are in the TRILLIONS) is also making the shift towards a fossil fuel free portfolio for climate reasons, starting with a full divestment from thermal coal. It makes good financial sense to try to beat Blackrock in the rush for the exits.
Finally, the biggest impact comes through divesting pension funds!
This requires some collective organizing, but the outcome could be massive. IN CANADA, find your pension or pensions at Shiftaction.ca and send an email demanding divestment — this will also sign you up for info about future actions targeting any pension funds you participate in. IN THE U.S., gofossilfree.org is a great place to start.
If your office or union (or country or province) has a pension fund, it’s probably invested in fossil fuels, although the divestment movement is starting to show results here (and saving their pensions from big losses in the process). 50% of UK universities have commited to divestment and many universities like UBC and Concordia have done the same — while universities like McGill and U of T drag their feet. U of T’s position is particularly egregious — after a working group of staff and students recommended full divestment with the support of most students and faculty — U of T’s president Meric Gertler unilaterally decided to stay invested in the carbon bubble, putting both U of T’s endowment fund and its reputation at risk. Like many dinosaurs, Gertler claims that U of T can use it’s ‘voice’ to guide the companies it owns toward better practices with an ‘ESG’ approach to investing. This claim is patently false. Fossil fuel companies have known about climate change for almost 50 years and they have done nothing but pour money into disinformation campaigns. Even now, as they claim to be a necessary part of the transition to a green economy, they are doubling down on oil and gas expansion and ignoring renewables entirely (except in their advertisments).
The Ontario Teacher’s Pension Plan also claims to take an ESG approach and touts their climate awareness all over their website. BUT THEY OWN THE COMMODORE OPEN-PIT COAL MINE IN AUSTRALIA through their investment in Intergen. Please explain to me how you take an ESG approach with a coal mine — other than selling it. I’ll wait.
The first step to divesting a shared pension plan is figuring out who is already organizing on the issue. At University of Toronto, you should connect with Leap U of T. If you’re part of the OTPP, you should let your union rep know that this is important to you. There will be motions on the topic at the OSTFF conference in March, so you should attend and vote them forward. If you’re enrolled in other pensions check out shiftaction.ca (Canada) or gofossilfree.org (USA) for more info.