As of late, coming across an article related to climate change, fossil fuels or in fact any ecological disturbance has become relatively unsurprising. As a matter of fact, it is common to come across several articles a day as the struggles increase to tackle animal extinction and the ever-rising temperatures and sea levels.
The hot topic at the moment is the divestment movement: bringing an end to fossil fuel sponsorship. Investing in fossil fuel companies essentially gives them the means to expand operations at a time of a global climate crisis; the logic in bringing an end to this support speaks for itself. Needless to say, large oil companies such as Royal Dutch Shell and BP (two amongst the 20 firms behind a third of all carbon emissions) are loathed by climate activists. It’s no surprise that oil companies are facing the possibility of belonging to a declining industry. In fact, oil companies are priced as if they are going out business, for example, Royal Dutch shares are trading lower than they were 5 years ago. It is also clear that the fossil fuel industry has lost its competitive edge as in the future, renewable energy will be our fastest-growing source of energy. However, this is no big secret to major oil companies, as a matter of fact, Royal Dutch Shell currently spends $2bn a year on developing cleaner energies (including solar and wind). Energy giant ExxonMobil now prides itself on fighting global warming. Due to new innovation and research, it’s now working on reducing carbon emission by capturing about 7 million tonnes of CO2 a year. Whether all this expenditure is chiefly to gain support and ultimately profit, is a much-debated issue. Yet what we can definitely say, is that the major oil giants are ‘progressively positioning themselves for the energy transition’, no matter what their motivations are. We could even go as far as saying that their sizeable capital allocation into the renewable energy sector indicates that they could be transforming themselves into energy companies. Are they themselves beginning to divest from their own industry?
Although climate change defenders see the divestment movement as a ‘moral and pragmatic imperative’, some argue that fossil fuel-free investing is the simpler and more effective option to save the world from climate change. One of the world’s most brilliant innovators, Bill Gates, questions the entire divestment movement by saying that it has ‘reduced about zero tonnes of emissions’. Instead, he suggests investing in green innovation. Nowadays, the necessity for investment falls heavily on low-carbon innovation and companies researching non-carbon energy sources in order to fight carbon emissions and obstruct markets such as fuel. In fact, this investment is urgent if we are to be able to support ourselves with renewable energy in the future. Many companies are now introducing ‘green business models’ – these are the ones to target. Luckily for us, today there is an abundance of businesses across many industries incorporating ecological innovation. For example, choosing to invest in plant-based food producers such as Beyond Meat or newer sustainable clothing brands such as Epoque Evolution or Reformation could definitely be an effective way to tackle global warming.
Yet it seems to me that fossil fuel divestment requires the fossil fuel industry to take responsibility for their significant role in the global climate crisis, without this movement this industry will remain unpunished. Slowly draining money out of the fossil fuel industry highlights its destructive influence on our planet. However, no one is preventing us from also supporting ecological companies and join them in playing their part in the uphill battle against climate change. Perhaps our best action in order to see a positive impact on our planet is to both divest and invest simultaneously.
I’m a third-year UCL student studying French and Spanish.