Fosil Fuel Industry Divestment - an Effective Tactic or a Risk Free Road to Self-Esteem?

Divestment isn't a new idea. The recent adoption of the tactic by some unions, student groups and others involved the protest movement against the fossil fuel industries isn't the best use of it though IMO. The divestment tactic was very effective in pressuring the racist apartheid regime in South Africa into negotiations that led to the dismantling of the apartheid system. The tactic  started being used in 60's but had very little effect until the US government  instituted regulations mandating it in the 80's.

Moving their money, was the key concept then as now. But until the percentage of investor ownership in the corporations under pressure became large enough the effect was minimal. Scale is really the key to the strategic success of the divestment tactic.. Investors will always refuse to alter their portfolios at the risk of diminished returns. Investors back then had many other options to move their investments into so moving involved very little risk to their bottom line. The same is true today. An analysis of the risk for the 234 college endowment funds across the country who have divestment campaigns undertaken by their students released on Tuesday by the Aperio Group found that when all fossil-fuel companies were excluded the additional risk increased by about 0.01 percent.

The big difference is that the fossil fuel industry is a wide ranging, highly 'profitable' multi-trillion dollar industry and all the university endowments and union pension plans put together only hold a tiny fraction of those stocks. Every dime divested by them is simply an investment for a different buyer, nothing actually changes, except the self-esteem of those who now feel they are making an effort. The pension and endowment funds would just use the money from the sales to buy other investments in a slightly different sector of the matrix that underlies corporate capitalism. Divestment would have to target the whole matrix underlying global capitalism which is far beyond their reach.

The fossil fuel divestment campaign might become a tool that helps to re-focus the conversation about energy, but in reality it's not going to make a damn bit of difference. As long as consumers remain convinced they are entitled to consume, global capitalists will have no trouble raising the capital they need to fulfill those demands.. It would be far more effective, IMO, for all those folks to live simply and consumed less.

But, there are areas where the divestment tactic can an effective weapon in the Green Dragon's overall strategy against the matrix supporting the unfolding ecological disaster. Divestment was successful against South Africa because the investors had little to lose but the corporations had a lot to lose in public relations, good will and stock value because the volume of divestment was potentially so large it was driving down market prices.

Every mineral extracted, every economic exchange, every dime invested in corporate capitalism, happens because of the demand of consumers. The fossil fuel divestment movement may be help symbolically to advance the awareness of individual consumers as to their backdoor involvement in the dastardly businesses and it could allow participants to temporarily feel better about themselves, but otherwise, it's meaningless.

There are though some excellent examples of where the holdings by union pension plans, and others, of certain individual corporations are so large that the even the threat of divestment would cause those corporations to change their behavior. More on that manana.