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Frequently Asked Questions about Divestment

What exactly does divestment mean?
We want zoos and aquariums to immediately freeze any new investment in fossil fuel companies, and divest from direct ownership and any commingled funds that include fossil fuel public equities and corporate bonds within 5 years. The complexity of these investments requires time and dedication to unravel, but the sooner we commit to move forward, the better.


Why fossil fuel companies?

By focusing on fossil fuel companies instead of other types of socially irresponsible investments, we join an international movement that is gaining momentum, generating conversation, and drawing needed attention to the true issue—that we want our governments to act on this.


What message do we want to send to fossil fuel companies?
200 publicly-traded and government owned companies hold the vast majority of the world’s proven coal, oil and gas reserves. Those are the companies we’re asking our institutions to divest from. The messages sent to these 200 companies are simple, because they reflect the stark truth of climate science:

  • They need immediately to stop exploring for new hydrocarbons.
  • They need to stop lobbying to preserve their special breaks.
  • Most importantly, they need to pledge to keep 80% of their current reserves underground forever.


How will all of this actually result in any change?

Though work must be done to reduce demand for fossil fuels by individuals and institutions (for which reason a “carbon offsetting” initiative is included in the movement), fossil fuel companies profit from denying climate change and stalling needed government action. Divestment is a way of calling them out on this behavior and drawing attention to the moral discrepancy in investing in these profitable companies at the expense of current and future generations who will be affected by climate change.

Divestment sparks discussion and gets media attention, moving the case for action forward. With the voices of many diverse institutions joining with those of individuals, this movement is making noise. The financial sector has already caught on to the danger of a “carbon bubble” and some investors are moving away from fossil fuel investments. Overall, that noise has to leverage the power of the state – not by asking politely as has been tried for years– but by disrupting “business as usual.”  Leveraging zoos and aquariums, universities, and other institutions to create a consensus within the investment world and the public at large can bring the fight to government bodies. Our intention is not to bankrupt fossil fuel companies, but history shows that the attention generated by divestment can change the course of events and instigate government action. 


Shouldn’t zoos and aquariums stay out of politics?

Divestment can be an uncomfortable step for a zoo or aquarium board to take, but these are not ordinary times. Scientists have made it clear that we’re running out of time to address the climate crisis. As institutions dedicated to conserving species, zoos have a special responsibility to help protect the future of our planet. It makes no moral or practical sense to pay for the conservation of a species or the education of a generation of children by investing in companies whose business plan guarantees that they will not have a recognizable planet to live on.


Companies like ExxonMobil, Shell and BP have billions of dollars. How can the divestment of a few institutions make an impact?

Divestment isn’t primarily an economic strategy, but a moral and political one. The more we can make climate change a deeply moral issue, the more we will push society towards action. We need to make it clear that if it’s wrong to ignore scientific warnings and perpetuate climate change, then it’s also wrong to profit from those actions. At the same time, divestment builds political power by forcing institutions and individuals (many of whom sit on institutional boards) to choose which side of the issue they are on. Divestment sparks a big discussion and — as we’re already seeing in the climate change campaign — gets prominent media attention, moving the case for action forward.

While sale of stock might not have an immediate impact on these large fossil fuel companies, what it does do is start to sow uncertainty about the viability of the fossil fuel industry’s business model. In order to keep warming below 2°C, a target that the United States and nearly every other country on Earth has agreed to, the International Energy Agency calculates that the fossil fuel industry will need to leave approximately 80% of their reserves of coal, oil, and gas in the ground. But as long as it’s economically feasible to mine fossil fuels, the companies will keep doing it. The only way to make it economically unfeasible is to impose the kind of regulations and fees that will make it prohibitively expensive to extract these resources.  

Divestment also starts to build momentum for moving money into clean energy, community development, and other more sustainable investments. More importantly, when other investors, be they individuals or pension funds, see their local zoos and aquariums begin to move in this direction with other institutions, they’ll also look into it.

Is it even possible for my institution to divest from fossil fuels?
Even though the first answer you receive from your board and fund manager might be “no,” the answer is YES! Boards of trustees can tell their money managers to develop responsible investment strategies that excludes direct investments in fossil fuel corporations and funds that include fossil fuels in their portfolio (it’s called “screening”). So don’t take no for an answer. As people realize the threat of the climate crisis and the role of the fossil fuel business model in perpetrating this crisis, more options for fossil-free funds are becoming available.


Can we still make a reasonable return without investing in fossil fuel companies?

While it’s true that fossil fuel companies are extremely profitable (the top five oil companies, last year, made $137 billion in profit—that’s $375 million per day), they’re also very risky investments. Coal, oil and gas companies’ business models rest on emitting five times more carbon into the atmosphere than civilization can handle, which makes their share price five times higher than it should be in reality. In addition, disasters like Exxon Valdez, the BP oil spill, along with massive fluctuations in supply and demand of coal, oil and gas, make energy markets particularly volatile, and therefore risky.

As the reality of climate change sets in, governments are having more conversation about creating policies to keep those reserves in the ground in order to fulfill the internationally agreed upon 2 degree Celsius temperature rise. Carbon Tracker Initiative states: “Currently financial markets have an unlimited capacity to treat fossil fuel reserves as assets. As governments move to control carbon emissions, this market failure is creating systemic risks for institutional investors, notably the threat of fossil fuel assets becoming stranded as the shift to a low-carbon economy accelerates.”

Report after report has shown that investing in clean energy, efficiency and other sustainable technologies can be even more profitable than fossil fuels . It’s a growing market, with over $260 billion invested globally last year, and a safe place for your institution to invest.


What about fiduciary responsibility of our boards to act in the best interest of our organization?

Administrators argue that fiduciary duty compels them to maximize returns, a position that ignores the social impacts of corporate externalizing of costs as well as the crisis of climate change.  There is no one single definition or interpretation of fiduciary responsibility, but it should not mean maximizing profits at the expense of the environment and the zoo community’s own policies or values. The fiduciary responsibility to act in the interests of stakeholders, for example, makes little sense without a commitment to intergenerational equity – a cornerstone of sustainable investment. Your zoo has the opportunity to look beyond immediate, short-term, and unsustainable ways of generating profits and returns.

A report by the world’s third largest law firm emphasizes the importance of environmental, social, and governance (ESG) issues to the investment decision-making process. The 2005 report was prepared for the United Nations Environment Programme Finance Initiative. Paul Watchman, senior author of the study, commented: “The report confirms that a number of the perceived limitations on the integration of ESG issues into investment decision-making are illusory. Far from preventing the integration of ESG considerations, the law clearly permits and, in certain circumstances, requires that this be done.” This legal interpretation has far-reaching implications for the institutional investment community worldwide.


Okay, so how does my zoo go about finding a clean place to invest our money and still get good returns?
Great question! Check out our resources page to learn more. The "Reports" section has several reports about investments.

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