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University endowment divestment from fossil fuel stocks: effective?

“Power plants with no fuel costs” such as utility scale wind and solar plants, are drawing interest from the likes of Prudential and GE. Even Morgan Stanley has gone beyond Socially Responsible Investing, and is offering impact investing to its clients (the difference being, rather than just avoiding the bad as in SRI, impact investing specifically targets sustainable companies and puts money there). Clean energy investments hit a record $260 billion in 2011, with the U.S. out-investing China on clean tech that year for the first time since 2008.

So, bottom line, yes, I think people will go for it.

Time horizon

Third, 5 years may seem a long time horizon. Divesting, once that’s the direction people have decided on, takes little time to execute. It’s a matter of investment managers scouring alternative investment options, and selling off shares of companies like ExxonMobil and Halliburton. It’s clearly not as simple as that. Investment managers likely fear for their jobs if portfolio performance takes a dive at all, so I’m sure many of them are scurrying around looking for cleaner investments.  But for all intents and purposes from a technological point of view, it’s pretty straightforward.

In the meantime, there are a lot of things a student, parent, or alumni can do to get started right away.

Take action

FossilFree has a set of recommended mutual funds that individuals can shift their money into:

In addition, students can put more money in their own pocket by following my advice, and biking to school (yours truly was honored as an alternative transportation hero at the University of Hawaii, where I teach in the MBA program):

[youtube http://www.youtube.com/watch?v=Bq4oM2ZaYMs]

With a simple and conservative estimate, I’ve saved $40,000 over the course of my career (post-tax income!) biking to work. For other ideas around green living that also saves you money and pulls that money away from fossil fuel and plastics companies, check out one of my favorite blogs, Green Living Ideas.

Students can also take their money away from petroleum companies by buying organic produce from local farms, reducing their energy use, carpooling, and, when they’re ready to live off-campus, choosing a location with good transit, bike lanes, or walkability to campus. Remember that petrochemicals are the originators of synthetic fertilizers and pesticides, so everything from dorm bedding to clothes to food, if not bought certified organic, contribute to the fossil fuel economy.

The Fossil Free group has called for May 2, 2013, to be the Fossil Freedom Day of Action, encouraging student groups to bring direct activism to either complement their college’s existing divestment, or to push harder for their university to divest from fossil fuel stocks. On this page, they’ve got outreach tips, media relations tools, and guides for groups just starting out, building momentum, or ready to escalate.

Photo from Fossil Free’s website

This post was sponsored by RHL.org.

Written by Scott Cooney

Scott Cooney (twitter: scottcooney) is an adjunct professor of Sustainability in the MBA program at the University of Hawai'i, green business startup coach, author of Build a Green Small Business: Profitable Ways to Become an Ecopreneur (McGraw-Hill), and developer of the sustainability board game GBO Hawai'i. Scott has started, grown and sold two mission-driven businesses, failed miserably at a third, and is currently in his fourth. Scott's current company has three divisions: a sustainability blog network that includes the world's biggest clean energy website and reached over 5 million readers in December 2013 alone; Pono Home, a turnkey and franchiseable green home consulting service that won entrance into the clean tech incubator known as Energy Excelerator; and Cost of Solar, a solar lead generation service to connect interested homeowners and solar contractors. In his spare time, Scott surfs, plays ultimate frisbee and enjoys a good, long bike ride.

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