Divest Invest is a movement that encourages institutions and individuals to sell investments in fossil fuel companies and instead invest in renewable energy and other climate solutions. Over 436 institutions representing over $2.36 trillion have already committed to Divest Invest. Supporters argue that fossil fuel investments are increasingly risky financially due to factors like regulation and innovation in renewables, and that continued investment is also at odds with legal, ethical, and moral obligations to address climate change. While engagement can be part of a responsible investment strategy, widespread collective divestment is needed to effectively shape markets and policy towards limiting global warming to 2 degrees Celsius.

1. DIVEST
INVEST
AN INVITATION TO ACCELERATE THE
ENERGY TRANSITION

2. CONTENTS
1. What is Divest Invest?
2. Who is doing it?
3. Background
1. The science
4. Why Divest Invest?
1. Sensible finances
2. Legal obligation
3. Ethical motivations
5. Addressing some of the arguments against Divest Invest
6. How to Divest Invest?

3. WHAT IS DIVEST INVEST?
To Divest Invest is to pledge, over time*, to sell holdings of fossil fuel shares
and invest instead in climate solutions, such as renewable energy, clean
tech and energy efficiency.
It has several aims:
1. Protect investments from the risks associated with climate change.
2. Remove the social licence for the use of fossil fuels that would exceed
the ‘safe’ carbon budget.
3. Raise awareness about the urgent need to reduce global extraction of
fossil fuels significantly to avoid dangerous climate change.
4. Increase investment in climate solutions.
The International Energy Agency estimates that we need £632 billion (€880 billion) per year to
shift to a clean energy economy.
5. Stimulate the finance sector to develop fossil-free investment products
to enable more investors to support a clean energy economy.
*we recommend within 5 years

4. WHO IS DOING IT?
Committed organisations
Each week more organisations and individuals are committing to Divest
Invest.
An assessment in September 2015 found 436 institutions and local
governments and 2040 individuals representing over £1.7 trillion (€2.36
trillion) had committed to divest invest.
116 foundations with over $10 billion in assets have committed to divest from
fossil fuels.
In the EU alone, 68 organisations worth over £1.28 trillion (€1.78tr) have
pledged.
Some of the organisations already pledged:
Ashden Trust
Frederick Mulder Foundation
Wallace Global Fund
Church of Sweden
Roddick Foundation
Glasgow University
Joseph Rowntree Charitable Trust
KR Foundation
Children’s Investment Fund Foundation
Rockefellers Brothers Fund
London School of Hygiene and Tropical Medicine
Tellus Mater
Organisations pledging to divest from coal
Oxford University
Axa
Norwegian Sovereign Wealth Fund
CalPERS and CalSTRS (California State pension schemes)
Support for Divest Invest:
Mary Robinson, Former President of Ireland, UN Special
Envoy on Climate Change: “[For any fund], it is almost a due
diligence requirement [to consider ending investment in dirty
energy companies]”
Justin Welby, Archbishop of Canterbury: “We believe it has
been instrumental in mainstreaming the debate around the future
of fossil fuels, which has contributed to the discussions we and
other investors have with fossil fuel companies regarding their
long-term strategic direction.”
Barack Obama: “You need to invest in what helps, and divest
from what harms.”
Nick Nuttall, the spokesman for the UN framework
convention on climate change (UNFCCC). “We
support divestment as it sends a signal to companies, especially
coal companies, that the age of ‘burn what you like, when you
like’ cannot continue,”
Christiana Figueres “Divestment may be a question of morality,
but it is prudent too.”
Hans Joachim Schellnhuber, founding director of the
Potsdam Institute for Climate Impact Research in Germany:
“[the divestment campaign is] the most important action that ever
happened on climate change."

5. BACKGROUND:
THE SCIENCE OF CLIMATE
CHANGE & FOSSIL FUELS
The Carbon Bubble Argument
1. International agreement states that average global
temperature must not exceed 2°C above pre
industrial levels.
2. To have 80% chance of achieving this, we can
only use 565 GtCO2.
3. The carbon potential of Earth’s known fossil fuel
reserves is 2795 GtCO2, so 80% of fossil fuel
reserves must not be used.
4. The majority of fossil fuel companies’ assets
($7trn) would be “unburnable”.
5. The current stock market valuation is inaccurate
and has created a carbon bubble.
Source: thinkprogress.org

6. BACKGROUND:
THE IMPACT OF CLIMATE CHANGE
“The science is clear: global warming is driven by greenhouse-gas emissions which are the result of burning
fossil fuels. If we fail to strongly reduce these emissions and to bend the warming curve, we, our neighbours
and children will be exposed to intolerable risks…… As any further delay to mitigation measures may
jeopardize climate stability and thus our future, it is time to form alliances, find common ground and act
together as humankind -- but also to take on individual responsibility and change what is in our power to
change.”
Hans Joachim Schellnhuber, Director of Potsdam Institute for Climate Impact Research
“Climate change is a medical emergency. It thus demands an emergency response, using the technologies
available right now. “
Hugh Montgomery, director of the UCL Institute for Human Health and
Performance, co-chair of the Lancet commission on Climate Change
“It seems likely that the capacity of the international community for humanitarian assistance would be
overwhelmed. The risks of state failure could rise significantly, affecting many countries simultaneously, and
even threatening those that are currently considered developed and stable.”
Cambridge University, Centre for Science and Policy
“Climate change is one of the most serious threats facing the world today. It is not just a threat to the
environment, but also to our national and global security, to poverty eradication and economic prosperity.”
David Cameron, Nick Clegg, Ed Miliband

7. WHY DIVEST INVEST?
A. FOSSIL FUELS ARE INCREASINGLY RISKY
INVESTMENTS
“As the world increasingly limits carbon emissions, and moves to alternative energy sources, investments in
fossil fuels…may take a huge hit.”
Bank of England.
“Depending on the climate scenario which plays out, the average annual returns from the coal sub-sector
could fall by anywhere between 18% and 74% over the next 35 years, with effects more pronounced over the
coming decade (eroding between 26% and 138% of average annual returns). Conversely, the renewables sub-
sector could see average annual returns increase by between 6% and 54% over a 35 year time horizon (or
between 4% and 97% over a 10-year period).”
Mercer, Investing in a Time of Climate Change
“Given depressed prices and long-term uncertainty, coal miners have started writing-off assets from
their balance sheets and may experience stranded assets as a result of carbon constraints.”
Standard and Poors

8. RISKY INVESTMENTS
ENVIRONMENTAL AND HEALTH REGULATION
International commitments: initial indications suggest there will be a global agreement to reduce GHGs at the
Paris summit in December 2015.
• EU want a legally binding 40% reduction by 2030 from 1990 levels
• USA has a target of 17% reduction by 2025 from 1990 levels
• China aiming to peak CO2 by 2030
Multiple national governments are already looking to limit fossil fuel use for climate and other health reasons:
• China banned low grade coal
• USA Clean Power Plan
Growing support for removing unjustifiable subsides
1. Government support for fossil fuels is substantial with figures ranging from $523bn to $5.3trillion per
year (through tax breaks, credit support, price cuts, to health costs of pollution, and environmental
damage)
2. A consensus is emerging from across the political spectrum that these sums are unjustifiable; it is time
for the companies to pay their due.
3. Without government subsidies, the stock market valuation would be significantly lower.
“We called for a phase-out of harmful fossil fuel subsidies. Act now. ..subsidies can be redirected to support
investment in clean growth.
Jim Yong Kim, World Bank President

9. RISKY INVESTMENTS
ECONOMICS
OIL
Oil prices are declining and the cost to extract oil is
increasing so Return on Investment is decreasing.
High-cost sources – “unconventionals” like deep-water
and oil-sands are most at risk of losing value. This is
already happening. In July 2015, $200bn worth projects
were shelved primarily due to a low crude price.
Paradoxically, high oil prices also endanger fossil fuel
companies as they make renewables more competitive.
Fossil-free indexes are currently
outperforming typical indexes
containing fossil fuels.
With excess supply and reduced
demand, the market views the
medium term outlook as poor on
purely economic grounds.
While some suggest this is just
cyclical, we believe it to be a
sign of structural change in the
energy markets.
COAL
Coal stocks have been declining sharply e.g. shares
in Peabody Energy Corp fell 90% 2014-15.
Coal bond prices fell 17% in 2nd quarter of 2015.
Mercer: “Over the next ten years average annual
returns from coal could be eroded between 26% and
138%.”

10. RISKY ASSETS
INNOVATION & THE RISE OF RENEWABLES
Cost of renewables especially solar electricity and energy storage dropping exponentially and beyond all estimations.
IEA: Renewables already provide cheapest form of energy in many places.
Grid parity expected globally by 2020.
Mercer: “Renewables could see average annual returns increase by between 4% and 97%.”
Rocky Mountain Institute

11. WHY DIVEST INVEST?
B: LEGAL OBLIGATION
Need to uphold charitable objectives
• Charity trustees should divest from carbon-intensive assets where the
trustees conclude that such investments conflict with the purposes of the
charity, even where the trustees consider that such a policy might be
expected to lead to or might risk significant financial detriment.
Need to minimise reputational Risk
• Charity trustees may also divest from carbon-intensive assets where the
trustees conclude that the risks to the work of the charity from such assets
outweigh the financial benefits to the charity or where the trustees conclude
that divestment would not involve significant financial detriment for the
charity.
Luke Fletcher, Partner, Bates Wells and Braithwaite

12. WHY DIVEST INVEST?
C: ETHICAL MOTIVATION
Given what we know about the risk posed by climate change, people across the world of all faiths and none
increasingly believe that it is not possible in good conscience to invest in fossil fuels.
UCL-Lancet Commission: “Climate change is the biggest global health threat of the 21st Century.”
Ban Ki Moon: “ending poverty, embracing human dignity and addressing climate change are
interlinked”…Climate change and sustainable development…are two sides of one coin.”
Mark Sainsbury: “We can no longer give with one hand, and invest in the problems with the other. I call upon
all other grant giving charitable trusts, faith groups, and investors. Look at the facts, listen to the arguments,
talk to financial advisers, and sign on the dotted line. The time has come to divest invest”
Archbishop of Canterbury, Justin
Welby:
“Climate change is the most pressing
moral issue in our world.”
Pope Francis:
“For human beings… to degrade the
integrity of the earth by causing
changes in its climate…these are
sins.”
Rabbinic Letter on Climate
Change:
“One way of addressing our
own responsibility would be for
households, congregations,
denominations, federations,
political action to Move Our
Money from spending that
helps these modern pharaohs
burn our planet to spending
that helps to heal it.”
Islamic Declaration on Climate
Change:
“We are in danger of ending life as we
know it on our planet…This current rate
of climate change cannot be sustained,
and the earth’s fine equilibrium (mīzān)
may soon be lost…. We particularly call
on the well-off nations and oil-producing
states to – Lead the way in phasing out
their greenhouse gas emissions as
early as possible and no later than the
middle of the century”

13. ADDRESSING SOME OF THE
ARGUMENTS AGAINST DIVEST INVEST
1. Divest Invest is already making a difference
• We’ve seen an enormous rise in the amount of money divested and reinvested in just one year, and the
industry is paying attention.
• With more support, DI will remove the political mandate for fossil-fuel subsidies and remove the social
licence for businesses to take us over and above the agreed carbon budget.
• The collapse in coal and oil prices have coincided with the divest invest movement, providing governments
and businesses with a stronger mandate for increasingly ambitious action and commitments to make climate
solutions competitive.
2. It’s paving the way for the future
• Of course we currently depend on high carbon energy, but we need to plan and invest now for a future
without them. DI is helping us do that.
3. There is great risk in not divesting
• The costs of failing to achieve a <2 C future will far outweigh the potential costs of divesting and
reinvesting.
4. Publicly-owned fossil fuel companies are the right piece of the puzzle to focus on
• State owned companies own larger reserves, but they largely need private sector finance and expertise to
extract the fuels within them.
• The cheaper climate solutions become, and the louder public support grows, the easier it will be for states to
develop these and leave fossil fuels in the ground.

14. RESPONDING TO ENGAGEMENT
Engagement can be a key part of a responsible investment strategy…but it has to be ambitious.
• Investors who seek to engage must do so only on the expectation that the company will be able to shift to a
<2 degree scenario and be prepared to divest if progress is not forthcoming.
• “Good housekeeping and incremental improvements in operations are not enough to deliver the
energy future we need.” Carbon Tracker
• ‘Where we think a company is not making sufficient progress towards the engagement goals set, we
will divest,’ Aviva chief executive Mark Wilson
Divest Invest has a wider impact
• Engagement misses three fundamental points of divest invest:
1. Stigmatisation of fossil fuels is key to send a message throughout society. A PWC survey suggests
80% of business CEO’s feel greater public awareness is the key driver for climate action
2. Divest Invest drives much needed support for and innovation in low-carbon alternatives
3. Large scale change is needed urgently – engagement typically results in small, scale incremental
change that does not challenge business assumptions and plans.

15. THE IMPORTANCE OF COLLECTIVE
ACTION BY INVESTORS
Investing in a Time of Climate Change, Mercer
• Stresses the importance of investors being “Climate Makers”
• Only through widespread, collective action will investors be able to shape a 2 degree scenario.
• “This year is perhaps our last chance to align international policy objectives behind strong
action. We hope the findings of this study will play an influential role in shaping the
commitments, disclosure, and changes needed to support a transition to a resilient, low-carbon
economy by limiting warming to within 2°C."
The Cost of Inaction, Economist Intelligence Unit
• Asset managers cannot simply avoid climate risks by moving out of vulnerable asset classes if
climate change has a primarily macroeconomic impact, affecting their entire portfolio of assets.
• While proactive steps addressing climate risk can demonstrate leadership, isolated activities
will ultimately be insufficient. This is a collective action problem that must be addressed if
carbon emissions, and thus climate risks, are to be reduced.
• It is clear that government action is required to establish a firm, clear price that reasonably
reflects its externality costs. Rather than opposing this, institutional investors can collectively
influence the companies in their portfolios to adapt and prepare for a lower carbon future.
Moreover, investors can actively engage with policymakers, encouraging them to address this
market failure as something that is in their collective self-interest.

16. RESOURCES
Measuring the Growth of the Global Fossil Fuel Divestment and Clean Energy Investment Movement
http://www.arabellaadvisors.com/wp-content/uploads/2015/09/Measuring-the-Growth-of-the-Divestment-Movement.pdf
US Department of Defence, 2014 Climate Change Adaptation Roadmap,
http://www.acq.osd.mil/ie/download/CCARprint_wForward_e%202015.pdf
International Panel on Climate Change http://www.ipcc.ch/index.htm
Mercer, Investing in a Time of Climate Change http://www.mercer.com/content/mercer/global/all/en/insights/focus/invest-in-climate-
change-study-2015.html
Carbon Tracker, Unburnable Carbon http://www.carbontracker.org/report/carbon-bubble/
Oxford Smith School, Stranded Assets and the fossil fuel divestment campaign, http://www.smithschool.ox.ac.uk/research-
programmes/stranded-assets/SAP-divestment-report-final.pdf
Kepler Cheuvreux, Stranded Asses; Fossilised Revenues, https://www.keplercheuvreux.com/pdf/research/EG_EG_253208.pdf
Global Subsidies Initiative, https://www.iisd.org/gsi/
International Monetary Fund, http://www.imf.org/external/np/fad/subsidies/
International Energy Association, Projected Costs of Generating Electricity.
https://www.iea.org/Textbase/npsum/ElecCost2015SUM.pdf
Gone Fishing: Divestment and Engagement http://www.carbontracker.org/divestment_engagement/
Aviva, Climate Change Value at Risk to investment and Aviva’s strategic response (including EIU report)
http://www.aviva.com/media/thought-leadership/climate-change-value-risk-investment-and-avivas-strategic-response/
--
Oil groups have shelved $200bn in new projects as low prices bite http://www.ft.com/cms/s/0/d6877d5e-31ee-11e5-91ac-
a5e17d9b4cff.html#axzz3hSV7snwc (accessed July 2015)

17. HOW TO DIVEST
INVEST?
http://divestinvest.org/europe/home/pledging/