Fossil Fuel Divestment Q&A

The Divestment Movement has been in the news recently with schools such as the University of California and University of Vermont making firm commitments to remove fossil fuel companies from their investment portfolios. Meanwhile, advocates continue to pressure other schools, businesses, and investment groups to divest their financial investments from fossil fuels, as every day the climate crisis grows more serious. While the early days of the modern divestment movement led by 350.org and other activist groups were primarily symbolic, the movement is picking up speed again as the world and our nation feel increased urgency to keep fossil fuels in the ground.

To share some of our perspective on divestment, we sat down with SunCommon’s Co-founder and Co-President, Duane Peterson, who has kept SunCommon’s 401k plan fossil fuel free since 2016.

Why is divestment important?

“The burning of carbon-based fuels is destroying Earth’s atmosphere. The remedy is to leave remaining fossil fuels in the ground and power our economy with clean energy instead. Investments in energy corporations that persist in ruining our planet is not just immoral but really bad financial planning. Just as shares in coal companies are now nearly worthless, oil stocks will tank too as humans turn away from their deadly products.”

Why did SunCommon decide to divest?

“The Divest/Invest movement launched in 2014 to encourage people to get their investments out of corporations harming our atmosphere and instead help grow the sectors restoring our environment. It’s turning away from the harms that got us here while simultaneously supporting the solution. At its core, SunCommon is a market solution to the climate crisis. So it is our obligation to get our own investments out of climate-killing companies and into firms that are doing the right thing for the planet.”

So wait a minute, do we say “divestment” or “divest/invest”? What’s the difference?

“Well, they’re similar, but “divest/invest” has specific relevance to today’s climate movement. The divestment movement has been around for a long time, before we were talking about divesting from fossil fuels. Divestment is most well known for the actions taken to end Apartheid in South Africa starting in the 1960s. Under social and political pressure, businesses and investors pulled their financial investments out of South Africa, which put pressure on the oppressive political class to end the era of legal discrimination, segregation, and racial oppression. This divestment movement was ultimately successful, leading to the democratic election of anti-apartheid activist Nelson Mandela in 1994.

So now with the urgency to address our climate crisis, we’re putting pressure on organizations around the world to divest/invest — to pull their financial interests away from fossil fuels and then invest them into clean energy and low-carbon solutions. So divest/invest specifically brings focus to reinvestment into the future we’re working to build.”

How did you start the process for SunCommon? Were financial institutions supportive? Who were the allies to make this happen for the organization?

“As a Benefit Corporation and certified B Corp, SunCommon is committed to caring for our employees, the communities in which we do business, and the very habitats that sustain our lives. So we offer our employees good pay and great benefits to support them and their families. One of those benefits is the employee retirement program that SunCommon contributes to, and we wanted to make it fossil-free.

Our 401k advisor, Hickok & Boardman, hadn’t done that before, but we chose to work with them because they share our values and provide really great service. They are true pros and are very conversant in the regulations concerning our fiduciary duty to our employees’ retirement funds. So when we committed to figuring out how to divest/invest SunCommon’s retirement plan, they helped us get it done and do it right, which is exactly what we wanted from that trusted partner. Today our employee retirement plan totals $3.3 million, all fossil-free.”

How has divesting impacted overall 401k performance for SunCommon employees?

“The performance of SunCommon’s retirement plan has grown handsomely over the years. Employees can choose from among 16 offerings across the various asset classes to suit their investment needs.”

Who else has done this?

“SunCommon is in really good company here. From the Rockefeller Foundation (funded originally with oil money), to the New York City Employees’ Retirement Fund, to our own University of Vermont — lots of thoughtful and responsible institutions are on board. Over 1,200 organizations have taken this step, committing to divest over $14 trillion dollars out of fossil fuel stocks. That’s really a lot of money to take out of a harmful industrial sector!”

What recommendations do you have for other organizations considering divesting? Or for employees lobbying their company to divest?

“Folks should only divest/invest if they want to rid their investments of stocks in companies that are harming our planet while protecting their portfolios from financial loss like the shareholders of coal stocks have suffered. If that’s true for you, find an expert to help you out. We found a local financial partner who was willing to work with our specific goals, and it worked out very well for SunCommon.”

DISCLAIMER: We’re not offering investment advice but sharing our own experience. You do what’s right for you, after doing your own due diligence based on what works for you. If you’re an employee and want to get your company on board with divesting, share this blog post with your coworkers, or learn more here.

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