One of the biggest hurdles in combatting climate change is to reduce our dependency on fossil fuels and other pollutants. However, there are individuals who still stand to profit from the industry. The only way to fix that is when the industry is no longer profitable or the business is no longer operational. A way to lead to that is by way divestment.
What is divestment?
Divestment is the opposite of investment. It is where you take out your money, in the form of stocks or bonds from a company so that you cease control or stop getting profit from it. Corporations are beholden to the wish of their shareholders. Thus, if there no longer any interest to pursue the business, operations can calm to a halt or at least, have less capital to operate.
Where has divestment been used effectively?
- South Africa
The apartheid regime was a dark part of South Africa’s history. It was a system where black and white citizens could not mix with only the white population receiving quality infrastructure and amnesties. Its impact on income inequality and racism can be felt even today.
At its peak, a majority of the world’s nations has imposed sanctions and divested from the country. Companies were supposed to invest in the country pulled out, amid pressures from nation states. The divestment was done in support of the growing anti-apartheid movement, led by notable leaders like Nelson Mandela and Desmond Tutu. It was the non-violent alternative to Mandela’s violent tactics that landed him in jail prior.
Recently, Desmond Tutu visited the University of California, Los Angeles to thank the university for pulling out investments from the country, which led other organisations to do the same. The regime then caved in from the economic incentive.
In opposition to the Zionist regime and the apartheid-like treatment done by the Israeli government on the people of Palestine, sympathisers ran the Boycott, Divestment and Sanction (BDS) movement. The movement was a non-violent alternative to boycotting products from the state of Israel to deprive them of revenue. Even if the impact is questionable, at least they know their money wouldn’t land in the hands of the Israeli military.
While economically, Israel still stands strong, the movement has gained traction in the European Union. This has led them to ban items from Israeli-occupied lands that were exported as Israeli goods. Due to this, multiple companies have decided not to invest or at least pulled out their money from companies based in the occupied territories.
How does this apply to the fossil fuel industry?
Desmond Tutu has called for the same tactics used in South Africa to be used in the fossil fuel industry. He urged companies to pull out the biggest industry players, making them unable to expand operations and stuck with their current situation. It is only when they decide to move on to other sources of energy than the world’s richest should be able to invest in them, without guilt.
Written by: Terence Aaron Anthony
Edited by: Choy Moon Moon