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Divestment and green investment

What is divestment and why is it necessary?

It sounds like something you wouldn't want to get your head round - however, it is simpler than it sounds - divestment is the opposite of investment - it is taking your money out of investments, maybe because they are being used to enable companies to carry out activities, that are not for the common good. Examples would be that they are harmful to our environment and contribute to climate change; or harmful for people, their rights, way of life or societies; or destructive of nature, ancient forests, seas, biodiversity, or habitats.

If you have a pension, you have investment

You may say, "but I don't have any investments". Most people have a pension and, for example, your pension may be invested in companies that are using your money to fund the extraction of fossil fuels, which will be used for energy, the creation of plastics, or the deforestation of virgin forests to create plant palm oil plantations.

For our bright future, action is needed on both a local and global level to end the financial support for, and expansion of, fossil fuel companies that are directly engaged in extracting coal, oil and natural gas, including fracking. There are many renewable energy technologies that are ready to upscale and need investment.

Green Investment

If you are investing your own funds there are now lots of lots of options to explore:

• green mutual funds

• green index funds

• green exchange-traded funds (ETFs)

• green bonds

• holding stock in environmentally friendly companies

• 'Pure Play' green investments - where most or all revenues come from green activities

Green Branding may Overstate Impact Reductions

Beware of 'green' branding which may give the impression of an investment being green when they don't actually have a commitment to green initiatives. Even if sincere, it may overplay a company's environmental practices or unstated their environmental impact.

Carbon Offsetting can have a Place, but ...

The UN Energy Programme (UNEP) explains, "Carbon offset schemes were set up to allow the largest polluters who exceed permitted emissions’ levels to fund projects, such as reforestation, that reduce carbon dioxide (CO2) in the air, essentially balancing out their emissions equation." So, carbon offsetting can be a positive tool in emissions reduction when part of a time-lined Decarbonisation Plan, where offsets are reduced as rapidly as possible. However, there is also concern that carbon offsets can also be used to shield and support inaction in a time when the transition to a green economy needs to progress as quickly as possible.

Pensions

Pension assets in the UK are huge and have the potential to fund the transition to renewable energy and zero carbon emissions, which is important to do as quickly as possible. These funds can be invested in the Green Economy - companies whose activities are aligned with environmentally friendly business practices and the conservation of natural renewable resources - the path to business supporting both people and the planet, now and for the future.

 

 

Page last modified: 05 Dec 2022, 18:34