Climate justice through divestment

“We are on the edge of a fundamental reshaping of finance.”

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SOURCEYes! Magazine

n recent years, a growing movement to achieve climate justice has connected the root cause of climate change not just with greenhouse gases but also with a more entrenched, insidious foe: capitalism. The United States supports a system that allows a few corporations and people to earn money off climate degradation, mainly through the extraction and proliferation of fossil fuels, such as coal or gas. And the very people who are tasked with regulating these industries, like federal elected officials, continue to choose not to. Time is running out to curb emissions and restore balance to global ecosystems, which is why front-line land defenders and climate activists are going straight to the source of climate chaos: financial firms. 

The movement is called “divestment,” and it’s growing both inside and outside financial institutions’ walls. The idea is simple: Pull money, talent, and public approval away from banks and financial institutions that invest in fossil fuel extraction. Most often, this comes in the form of grassroots student-led campaigns at universities and colleges, as was the case with the Harvard students whose protests convinced the president and board of trustees to divest its $42 billion endowment from fossil fuel-related investments.

Divestment first emerged as a strategy in the 1980s in the fight against South African apartheid.

Divestment first emerged as a strategy in the 1980s in the fight against South African apartheid. Environmental activist and founder of 350.org Bill McKibben was one of the first major U.S. figures to recycle the idea to apply to universities and financial firms, outlining the case for divestment in a 2013 Rolling Stone piece. “The logic went something like this: Most people don’t live near a coal mine [or] oil pipeline, but everyone is near some pot of money—their college endowment, their church pension fund, their local pension fund in their community,” McKibben says. “Those are all sites where you could take effective action about climate change.” 

Some “good-hearted” universities, like Unity College in Maine, were the first to divest their assets from fossil fuels, which offered activists early momentum and evidence that divestment wins were possible. And divestment strategies have expanded and diversified since then to include disrupting pipeline construction and funding, thwarting college recruitment efforts, and organizing members of state pension boards. 

Over the past decade of climate activism, McKibben says, what’s made the divestment movement successful is how diffuse the individual, primarily student-led campaigns have been. The strategy of divestment campaigns on college campuses, in solidarity with front-line resistance efforts and organizing at state pension board meetings, are working: Extractive corporations increasingly report challenges raising capital for their projects. Investors are pushing banks to downsize fossil fuel financing, and debt financing has gotten more expensive. Stock options in fossil fuels are no longer seen as viable investments. 

Even Larry Fink, the head of one of the largest private asset managers that funds climate change, has conceded, “We are on the edge of a fundamental reshaping of finance.”

If money talks, what is it saying?

Divesting from the banks that support extractive industries takes a multipronged approach, says Matt Remle, an enrolled member of the Hunkpapa Lakota and the co-founder of Mazaska Talks, a coalition of Indigenous people and activists that targets pipeline funders. No corporation or oil company has enough financial footing on its own to construct a pipeline without the help of multiple banks, he explains. In other words, banks are sustaining the extractive companies, profiting off their returns, and financing the debt—all at the expense of the planet. 

Despite annual commitments over the past decade from G-20 countries to end their reliance on fossil fuels, governments continue to provide hundreds of billions of dollars in financial support for the industry. So instead of relying on far-off targets and broken promises, Native leaders and grassroots activists are waging campaigns against the financial industry from a consumer standpoint. 

Mazaska Talks has staged direct actions to shut down bank branches, organized community groups and churches to change which institutions they bank with, and even introduced the Socially Responsible Banking Ordinance in Seattle to push the city to cut ties with banks that fund fossil fuel extraction.

Maza means “metal” and ska means “white” in Remle’s Lakota language, which is a testament to the continuous nature of American capitalist violences as well as Native resistance to genocidal forces. “I’m Lakota Standing Rock, and I think we’ve never been at a time of peace with the settler colonizers,” Remle says. “It just has changed forms, and the battlefield has changed, and the weapons used have changed, and that’s really about it.” 

Now, the battlefield is financial institutions, and the weapons are public education and outrage, Remle says. The organization encouraged people to move their money out of Bank of America during the fight against the Keystone XL pipeline. Now, the fight concerns Wells Fargo and the section of a transnational pipeline called Line 3, which runs through northern Minnesota. 

“The only thing that will talk to them is the money,” Remle says. “So when we started going after [the] money, [it] was the first time corporations and banks started listening.” 

Who wants to earn a paycheck from a financial institution?

Divestment isn’t just about moving money. It’s about fundamentally changing the companies that invest in fossil fuels, either by pushing them to consider climate change as a threat to their business or by withholding labor and workers. This part of the divestment fight often starts on college campuses, where students are demanding more from potential employers. 

“When you think about market forces,” says Sof Petros, a distributed organizing support coach at Future Coalition, “what are the things that actually get corporate targets to move?” Answer: potential young employees and corporate “recruiting pipelines,” a catchall term for the various ways banks show up at universities to attract potential workers—the future of their workforce. 

Petros helps young people on college and university campuses develop strategies to disrupt the recruitment pipelines that financial firms typically rely on to bring in young and talented employees. To push back against the neutral or positive messaging of banks and asset managers, Petros says the work begins before career day by changing how students think of banks and shifting what influence financial firms have on campus goings-on. On some campuses, that looks like pressuring boards of trustees to disinvest from fossil fuels, refusing to allow banks to open a branch on campus, bird-dogging professors who also sit on boards of financial institutions, or refusing donations from financial institutions altogether. 

Divestment isn’t just about moving money.

There’s a long history of divestment on college campuses, McKibben says. “One of the best results of the divestment campaign was that many of the students who undertook it in the U.S. … graduated from college and went on to form the Sunrise Movement and bring us the Green New Deal.” The Green New Deal legislation and the swell of grassroots organizing that emerged across the country in support of it catalyzed a new generation of climate activists, leaders, and political candidates.

“Corporate targets are very sensitive,” Petros says, because “they’re used to … evading public consequences for their actions.” Whether it be their inoculation from facing consequences for the 2008 financial crisis or the fact that banks are still engaging with predatory and harmful practices that led us there, financial institutions have slipped through the cracks of government accountability. Pushing back against the direct source of climate harm—and seeing a response—shows there’s hope in the fight against climate change. 

Amber England, a community organizer and masters student at the University of Houston, piloted some recruitment disruption tactics on her campus in fall 2021. England’s current focus is on AIG, a global insurance company that invests billions of dollars in insuring fossil fuel extraction. “They are one of the only companies without any commitment to reduce its support for fossil fuels,” England says. “They’re facing a recruitment crisis, and they’re struggling to recruit new talent.” Part of that is because young people are no longer willing to put up with financial firms’ long hours and demanding workplace culture for the pay. The other part is that young people are questioning the ethics of working for financial firms more broadly.

During a virtual career fair this year, England pretended she was looking for a job at AIG in order to secure a meeting with the recruiter, and then proceeded to ask them questions about their company’s climate policies and support of the fossil fuel industry. “I was [later] relayed an anonymous email from the [AIG] sustainability team that basically said that climate change is a complex issue and it isn’t in the best interest of their stakeholders to completely divest from fossil fuels.” 

Next semester, England hopes she’ll be able to ask these questions at an in-person recruitment fair in front of other students to demonstrate that the insurance company doesn’t have answers when it comes to climate change—or the futures of its potential employees. 

Dispersed campaigns of recruitment disruption seem to be working. Petros says she and other organizers have been invited to discussions by Chase, Morgan Stanley, and Citibank, and while these meetings are tense, they “chip away” at the grip banks have on university leadership and students. The larger goal of these efforts is to push these companies to change their investment or insurance portfolios to exclude fossil fuels altogether.

What would you do if your retirement savings put your future at risk? 

It’s not just private money and institutions that fund fossil fuel extraction; it’s also public pension funds run by elected officials. The problem is that most people don’t know their retirement savings are being used in this way, much less that there’s something they can do about it. Mary Cerulli, the director of Climate Finance Action, which trains coalitions to organize individual states’ publicly funded investment portfolios, says pension board treasurers and board members who are both appointed and elected “haven’t used the muscle of these huge pension funds to mitigate the climate crisis.” 

But they can. 

Across the country, state and local government pension funds total $5.1 trillion. That’s public money managed both by government officials and outside asset managers, including Vanguard and BlackRock, Cerulli says. “Vanguard and BlackRock are the number one investors in coal, the number one investors in deforestation companies, the number one investors in utilities,” Cerulli says. She and the CFA team help other organizers build relationships with pension board treasurers to understand what’s blocking them from making changes.

Pension funds can change the asset managers they hire if constituents lobby for change and members of pension boards self-organize to shift the portfolio of investments. For instance, Cerulli explains, when the Massachusetts pension board treasurer and chair wanted to shift elements of the portfolio to exclude fossil fuel extraction, she had to organize and educate two climate deniers on the board, which CFA assisted with. Working with those who manage money or with third-party financial firms can yield different results than an outside public pressure campaign that stands in opposition to banks, like strategies of direct action protests or pulling one’s savings account from a bank. 

In the past decade alone, $40 trillion has been divested from fossil fuels, meaning the divestment movement is growing and, importantly, is effective. Divestment is showing in real time that everyday people can take part in the fight against climate change, and it’s demonstrating to financial firms that climate change is no longer a worthy investment.

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Ray Levy Uyeda is a Bay Area-based freelance writer who focuses on gender, politics, and activism.

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