With the climate crisis intensifying, we all need to take a stand to oppose dirty energy and support clean energy alternatives. One of the most powerful actions we can take is divesting from fossil fuels and reinvesting funds in the clean energy economy.

The time for action has never been more urgent. We have already surpassed the 2014 record for the highest global temperature. Shrinking glaciers, droughts, rising seas, heat waves—we have more than enough evidence to compel us to act personally and collectively.

The Divest-Invest climate movement is an increasingly powerful force to help achieve the goal of a global clean energy economy. Individuals and institutions—together worth more than $3.4 trillion in assets—have pledged to divest from fossil fuels. More than 500 institutions, including foundations, colleges and universities, pension funds, faith-based organizations, and civil society groups have pledged to divest either in whole or in part from fossil fuels. Already, 46,000 individuals are pledging to divest. You can join this movement too!

Investors who divest from fossil fuels and invest in climate solutions will drive the energy transition the world must make. And those who move their money early will benefit, unleashing the innovation needed to secure our survival and ensure our prosperity.

Ellen Dorsey, executive director of the Wallace Global Fund

The Power of Divestment

Divesting sends a clear message: fossil fuels are toxic to people and the planet, therefore they are toxic to our portfolios. Divestment forces CEOs and politicians to take notice because it signals the severity of an issue.

So why divest from fossil fuels?

Five Reasons to Divest

Align Your Investments With Your Values
“If it’s wrong to wreck the climate,” says 350.org founder Bill McKibben, “then it’s wrong to profit from that wreckage.” When you divest from fossil fuel companies, you align your investment criteria with the green values you put into practice in other areas of your life.

Reduce Your Exposure to Climate Risks
Studies by numerous analysts, including the London School of Economics, the Aperio Group, HSBC, and Impact Asset Management, demonstrate that fossil fuel companies may be overvalued by as much as 40 to 60 percent. Divestment from fossil fuel companies can help protect your portfolio from the potential future “carbon bubble.” (“Carbon bubble” refers to the over-valuation of fossil fuel companies. If we are successful at keeping their carbon product in the ground, then they will be unable to access the reserves on which their value is based.)

Name and Shame the Worst Companies
In Stranded Assets and the Fossil Fuel Divestment Campaign, an October 2013 report by the University of Oxford, the authors pointed out that the stigmatization of divestment targets has always been one of the key factors triggering social change.

Join a Growing Movement
More than 400 institutions and thousands of individuals have made commitments to divest in whole or in part. When you divest, you’re joining one of the most critical progressive movements of our time.

Everyone Can Take Part
If you have a bank account, you are an investor. Everyone can move their money from banks that support fossil-fuel companies to banks with a community development focus. Find better banks and credit cards at Green America’s Break Up with Your Mega Bank, and find fossil-free investing resources.

10 Worst Oil and Gas Companies

  1. Gazprom

  2. Rosneft

  3. PetroChina

  4. ExxonMobil

  5. Lukoil

  6. BP

  7. Petrobras

  8. Royal Dutch Shell

  9. Chevron

  10. Novatek

The Carbon Underground 2015

How Will Divesting Affect Your Portfolio

As the effects of climate change worsen and more governments move to tax and limit carbon emissions, fossil fuel companies now count as assets will lose their value. Eliminating carbon from your portfolio now will help you avoid future risk from devalued carbon assets.

In the meantime, carbon-free portfolios offer competitive returns. In fact, 2013 research from S&P Capital IQ found that universities with endowment divestment campaigns would have seen greater returns on their investments had they divested from fossil fuels ten years earlier.

The logic of divestment couldn’t be simpler: if it’s wrong to wreck the climate, it’s wrong to profit from that wreckage.

Bill McKibben, climate activist, author, founder of 350.org

Are you ready to join the movement to divest from fossil fuels?

Take the pledge.

Let your voice be heard.

Getting Started

We can make a US clean-energy economy a reality by refusing to invest in companies that are destroying our planet. We can shift our investment dollars into clean energy and support public policies that move us away from fossil fuels.

Green America is proud to partner with 350.org and the DivestInvest Campaign. Here’s how to get a started:

  1. Divest Your Fossil Fuel Company Holdings: Sell any holdings in the top 200 companies with the most fossil fuel reserves. If you are invested in mutual funds, switch to fossil fuel free funds and urge your fund companies to offer fossil fuel company-free options. To ensure your portfolio remains balanced and geared toward your financial goals, work with a financial planner or asset management firm that understands the importance of fossil fuel company divestment.

  2. Make Your Banking & Credit Cards Fossil-Free: Many conventional mega-banks invest in fossil fuels. You can bank with a community development bank or credit union that is fossil fuel company-free and that helps local communities prosper. Visit BreakUpWithYourMegaBank.org for information on switching your accounts. If you use a credit card, be sure it is from a community development credit union that supports people and the planet. Visit TakeChargeofYourCard.org for information on green credit cards.

  3. Reinvest in a Clean Energy Future: There are a growing number of investment products that are free of fossil fuel companies and support clean energy investment and efficiency. Use the list of financial services companies below to find funds, certificates of deposit, ETFs, and service providers who can help you create a portfolio that meets your needs. Most of the companies are certified members of Green America’s Green Business Network®.

10 Worst Coal Companies

  1. Coal India

  2. China Shenhua

  3. Adani

  4. Shanxi Coking

  5. Anglo American

  6. BHP Billiton

  7. Yitai Coal

  8. Datang Intl.

  9. China Coal

  10. Peabody Energy

The Carbon Underground 2015

Steps to Divest and Reinvest

Divest from Fossil Fuels

If you directly own stocks in specific companies, you can divest yourself of your fossil fuel holdings just like a municipality or retirement fund would. Simply identify the problematic stocks you no longer wish to own, and sell them. Find the ten largest fossil-fuel companies or find the list of the largest 200 at 350.org’s go fossil free.

Another option is to donate your stock to a nonprofit organization and use your donation as a tax write-off.

But most people don’t do their own direct investing. If you invest in mutual funds, or a retirement account, you can call your accounts and ask for your money to be directed into fossil-fuel-free investments. If your current investment companies don’t offer fossil-free options (and most don’t!) tell them that you are considering divestment, and will move to other investment products that better match your values.

Use the Fossil Free Funds online tool produced by As You Sow and Morningstar to find out the fossil fuel exposure of your mutual funds.

Divestment can make good financial sense for your portfolio. Over the long term, as the effects of climate change become more apparent, and as more and more governments adopt policies to limit carbon pollution, the carbon resources that fossil fuel companies currently count as assets could shift to liabilities. Studies by numerous analysts, including the London School of Economics, the Aperio Group, HSBC, and Impact Asset Management, demonstrate that fossil fuel companies may be overvalued by as much as 40 to 60 percent. Financial analysts call this overvaluation the “carbon bubble” and explain that it could cause similar financial turmoil to previous overvaluations (like the 2007 “housing bubble”) when it bursts. Divestment now could protect your assets in the future. But what to do with the money you divest from the fossil fuel companies? Answer: Reinvest in the clean energy future.

Reinvest in Clean Energy & Fossil Fuel-Free Products

“Investing in fossil fuel today seems like investing in the whaling industry in the mid-1800s—old technology, still dominant, but clearly not the future,” says John Streur, then-president of Portfolio 21 and now the president/CEO of Calvert Investments. “Our ability to power the global economy beyond the current age of fossil fuels will be the most important and difficult transformation ever made by our industrial society.”

Streur points out that global investors like Portfolio 21 can scour international markets for the most stable and forward thinking companies to fill out a responsible portfolio, while excluding companies that are “emphasizing hydro-fracturing and other forms of oil, gas, and coal production.”

A handful of companies like Portfolio 21 specifically offer broad-based mutual funds that exclude dirty energy companies by policy. You can also find exchange traded funds that focus on clean energy, mutual funds that are less broad based and focus on clean energy, and community development mutual funds that exclude fossil fuels due to their mission to invest in smaller, local sustainable businesses. These investments tend to require minimum investments of around $1,000 to $2,500.

Invest in Clean Energy for Your Home & Community

For many people, their most valuable investment is their home. If you don’t find yourself in a position to invest $50,000 via a financial advisor, you may be able to invest in clean energy for your home, raising the value of your property.

An April 2011 study of California homes by the Electricity Markets and Study Group found that home-owners who had installed a “relatively new” and “average sized” solar photovoltaic (PV) system on their home recouped an average $17,000 more on the sale of their home, over similar homes without a PV system. As the report explains: “The research finds strong evidence that homes with PV systems in California have sold for a premium over comparable homes without PV systems.”

Many states offer tax incentives for improving your property with clean energy. Check DSIRE, the Database for State Incentives for Renewables & Efficiency for incentives in your state.

And finally, even if you don’t own a home, or can’t go solar at home yet, in many areas of the country you can invest in collective purchasing of community based solar projects. Those with very little up-front capital can often buy into solar collectives for the price of a single panel (around $500), and then begin to recoup their money as credits on their utility bill.

At the higher end of the investment continuum, a participant who purchases enough panels to cover a home’s full energy needs benefits from the collective structure (optimal siting of panels, collective maintenance), and spends less money than on a complete individual at-home system. The investment tends to break even more quickly too, in around 10 to 13 years, versus up to 20 or 30 years on many home-based systems.

Shift Your Bank Accounts & Credit Cards

Even if none of the above divestment and reinvestment strategies apply to your current financial situation, you can still take part in the divestment movement.

If you have a bank account, you are an investor, and the money sitting in your checking and savings accounts serves to advance the interests of your bank.

For example, Bank of America, Citigroup, and JP Morgan Chase have ranked as the top-three financiers of mountain top removal coal mining and coal-fired power plants in the US, according to a report by the Sierra Club, Rainforest Action Network, and BankTrack. In May 2015, Bank of America announced it would divest from coal projects. If you bank with the other corporate mega-banks, however, you’re investing in fossil fuels. While activist pressure has ended megabank investment in mountain removal coal mining, these companies are still heavily invested in fossil fuels in general. By contrast, community development banks, with their mission to lift up communities and invest in small, local businesses, can offer you access to checking and savings accounts (and other banking and investing products) that aren’t tainted by investment in fossil fuels.

Find better banks at Green America’s breakupwithyourmegabank.org, and find credit cards from community development banks at takechargeofyourcard.org.

Support Institutional Divestment Movements

“The fossil fuel divestment movement is the apartheid of this generation,” says Michael Kramer of Natural Investment. “Climate change impacts the entire planet and is a direct threat to our survival ...The more people who clamor for divestment, the more likely that elected officials will listen.”

Individual divestment is an important first step. And when we work together to convince more and larger institutions join the divestment movement, it will be even harder for fossil fuel companies to ignore their stigmatization as an industry fueling the destruction of the planet.

Financial Products & Services

It is wrong for us to continue on this path of not moving from fossil fuels to clean energy and we must stop the madness now.

Reverend Lennox Yearwood Jr, president of the Hip Hop Caucus

Signs of Progress

Over time, more and more people have come to understand how our economic decisions and actions have ripple effects throughout society and around the world. How we make profit is as important as how we use profit. Both individuals and institutions need to apply their values to decisions about their investments—including bank accounts, mutual funds, and stocks and bonds.. Simply put, our concern about climate change needs to be reflected in our financial decisions; our portfolios, no matter what size, should point toward a clean energy future. This is necessary for both the planet and for our long-term economic well-being.

Divestment is growing rapidly. A few recent high-profile examples of climate-related divestment include:

  • In June 2015 the California Senate passed legislation requiring the giant CalPRS and CalSTRS state pension funds to divest from coal unless the industry converts to clean energy. Three months later, the California Assembly also passed this legislation. The bill now awaits final approval from the governor.

  • In August 2015, the largest coal port in the world, located in Australia, voted to divest its $270 million portfolio of fossil fuels—including coal. While the port depends on coal at present, there is growing recognition that a new direction is needed.

  • In September 2015, the University of California system divested its endowment and pension fund of direct company stock in coal and oil sands in order to address concerns about climate change and the financial risk inherent in those fossil fuel investments.

The fact that fossil fuels are deeply embedded in the economy cannot be an excuse for inaction. Ever more individual and institutional investors are taking leadership and divesting their portfolios of fossil fuels.