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Nonprofit Leader Discusses Fossil Fuel Divestiture and the Uncertainty of Oil Investments



Divestment from fossil fuel companies is on the rise. Activists have been protesting institutions’ investments in fossil fuel companies, driven by concern about the carbon footprint and environmental impact of coal, oil, and gas.

Individuals and institutions troubled by the environmental impact of their fossil fuels investments are faced with a dilemma: do they revoke their patronage to companies like ExxonMobil, Chevron, and Shell, taking the financial hit from the recent downturn of the fossil fuel industry as they divest or do they keep their investments and encourage fossil fuel companies to invest in renewable energy?

This is the question that Danielle Fugere, president and chief counsel of the nonprofit environmental shareholder advocacy group, As You Sow, tackled during a July 6 talk at the California Energy Commission.

Fugere talked about the current climate and challenges of being a shareholder in oil and gas companies that are facing high rates of divestment. Fugere’s presentation challenged those companies to rethink methods of retaining shareholders and invest in renewable energy.

Investors and shareholders are dealing with uncertainty about the future of their investments as to whether fossil fuels companies will reemerge as some of the S&P 500’s top companies or will renewable energy companies surpass them, she said. But, Fugere suggests that the companies can do both: reemerge as top S&P 500 energy companies while adopting renewable energy practices.

“As long-term investors, what our shareholders believe is, we have to be in it for the long term. So are these companies in it for the long term, or are they going to explode and fall apart?” Fugere asked.

To ensure that companies like ExxonMobil, Chevron, Shell and BP don’t “explode and fall apart,” Fugere said these companies need to be reassured that their investors and shareholders support decarbonization and diversification of their energy efforts.

Otherwise, fossil fuel companies will not be the only ones hurting from divestiture. Shareholders who have counted on a return on investment from these companies are finding that the world’s dependence on fossil fuels is no longer predictable, reducing the market’s ability to rebound, she said.

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California Energy Commission

The California Energy Commission is the state's primary energy policy and planning agency created by the Legislature in 1974.
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