The carbon divestment trend seemed to be slowing with Microsoft founder Bill Gates labeling divestment “a false solution” and universities with major endowments including Harvard and MIT resisting pressure from activists and deciding not to divest.
But then last week at COP21, 350.org and Divest-Invest, two organizations coordinating the fossil fuel divestment movement, announced more than 500 institutions representing over $3.4 trillion in assets have made some form of divestment commitment.
The organizers did note that some of the commitments are only partial divestments, and the $3.4 trillion represents the total amount of assets represented by institutions, not the amount of money divested, which is difficult to track due to varying degrees of disclosure.
An earlier report by Bloomberg found the divestment trend is not hurting large electric, oil and gas companies — is the effort really anything more than public shaming?
A Forbes article by Christopher Helman says no, and suggests a better idea would be to take advantage of coal bankruptcies to buy up cheap mines and close them forever.
And as Gates explained in an interview with the Atlantic magazine where he criticized the move to divest from coal and other high-emitting companies: “If you think divestment alone is a solution, I worry you’re taking whatever desire people have to solve this problem and kind of using up their idealism and energy on something that won’t emit less carbon — because only a few people in society are the owners of the equity of coal or oil companies. As long as there’s no carbon tax and that stuff is legal, everybody should be able to drive around.”
Meanwhile Microsoft’s internal carbon fee has reduced the company’s emissions by 7.5 million metric tons of CO2e, since it was established three years ago, and saved more than $10 million per year.
So why do companies continue to divest? Environmental Leader posed this question to Dignity Health, a 21-state network of more than 400 health care centers. At COP21 Dignity Health announced it will divest in thermal coal companies and expand investments addressing climate change and sustainability.
The company says it has limited overseas investments related to thermal coal. It wouldn’t put a dollar amount on the investment.
Dignity says it initially focused on US investments “as broad divestment may have a negative impact on vulnerable communities,” says Shelly Schlenker, vice president of public policy, advocacy and government affairs at Dignity Health. “Our scope of Dignity’s commitment illustrates the complexity involved in committing to sustainability without harming susceptible populations.”
When asked to respond to the argument that divestment doesn’t make sense or really help the environment, Schlenker says restrictive screens — like the one just instituted to restrict future investments in coal companies — can help ensure Dignity Health doesn’t profit from environmentally destructive firms.
“While Dignity Health believes advocacy and corporate engagement are the most effective means to drive significant change across a variety of environmental, social and governance issues, restrictive screens are used in other areas where Dignity Health does not want to profit from business that will cause harm individuals or the environment,” Schlenker says. “We feel strongly that climate change and its associated health implications are a threat to public health. We chose thermal coal because it is the nation’s largest source of carbon dioxide emissions and a major contributor to global warming.”
The health care system has also taken steps to reduce its own emissions and environmental footprint, pledging to increase its use of renewable energy to 35 percent and to reduce its greenhouse gas emissions by 40 percent by 2020. The company says it’s ahead of its goals to meet these targets by 2020.
Late last year Dignity Health signed a pledge — along with Facebook, Autodesk and other major corporations and government purchasers — to preferentially purchase furniture made without toxic flame retardant chemicals. And in June it was among the US businesses representing more than $50 billion in investment and purchasing power that said it will require vendors, suppliers and builders to use a new tool that measures the use of harmful chemicals in products and production processes as part of the Chemical Footprint Project.
Targeting thermal coal holdings in its portfolio is an extension of these efforts, Schlenker says. “We are proud of our comprehensive efforts to address climate change and will continue to advocate aggressive strategies that will directly reduce the risk to public health,” she says. “Our hope is that our actions will inspire other health care organizations to reevaluate their environmental policies.”
Photo Credit: coal power plant via Shutterstock
