The fossil fuel divestment movement has been growing like crazy in recent years, and recent evidence suggests that these divestment announcements have a direct impact on companies' share prices—and hence their access to capital for further production and exploration.
Yet many pension funds and other institutions will resist pressure to divest, often citing fiduciary rules that require them to seek the "best returns" for their investors. That's always seemed like nonsense to me. After all, as the carbon bubble comes more clearly into view, there's a strong case to be made that many fossil fuel assets will become stranded as the world moves away from coal and oil.
Still, the excuse does get used, but not for much longer in the UK. The Guardian reports that the UK government is going to allow pension schemes to "mirror members' ethical concerns" and "address environmental problems"—meaning funds worth a total of £2tn (US$2.6tn) will now have more flexibility to respond to members' calls for them to move away from fossil fuels.Like I say, it already seemed silly to argue that not investing in industries that are destroying our planet and rapidly becoming pariahs in many parts of the world is somehow against investors best interests. Or that moving your money instead to rapidly growing technologies like renewables or electrified transportation was somehow irresponsible. But clarifying these rules will put one more nail in the coffin of what Alex Steffen refers to as predatory delay.
And that can only be a good thing.