Ireland is on track to become the first nation to divest from fossil fuel companies. The Fossil Fuel Divestment Bill, expected to become law soon, requires the nation to get rid of $350 million in investments in 150 oil, gas, coal, and peat companies. This will be one of the biggest wins to date for the fossil fuel divestment movement.
The move drew praise from environmentalists and progressive politicians around the world. Commending this initiative, U.S. environmental activist and co-founder of 350.org Bill McKibben stated on Twitter, “Ireland’s decision to divest from fossil fuels staggers me. It’s one of the landmark moments in what has become the largest campaign of its kind in history. Such thanks to all who fought.”
The lower house of Parliament passed the divestment bill to remove fossil fuels from the country’s €8 billion national investment fund. The bill is expected to pass the upper house and has the support of Prime Minister Leo Varadkar. Once enacted, Ireland will move ahead with its divestment plan “as soon as practicable” with the expectation that this will occur within five years.
“I think it’s significant in shaping the whole argument around climate change. The fact that the Government is accepting it should strengthen … its commitment,” said Irish Parliament member Thomas Pringle, who introduced the bill. “Ireland must take on its fair share of the burden of climate action.”
The bill is poised to help change Ireland’s reputation as a climate “laggard.” Climate Action Network Europe ranked Ireland as the second worst actor in the European Union in the fight against climate change, finishing only behind Poland.
What is divestment?
The fossil fuel divestment movement, which was started by 350.org in 2010, seeks to have a broad of range of institutions eliminate their investments in coal, oil, and gas companies. Most of the campaigns focus on a list of the top 200 fossil fuel companies. Inspiration comes from the success of previous divestment campaigns, most notably the worldwide 1980s campaign to divest from South Africa as a protest of apartheid.
While the divestment movement has become a popular tactic to attack the driving forces of climate change, it is not without critics, who have panned the movement as being futile and misguided. They have questioned whether the movement will result in significant action against climate change.
However, the impact of the divestment movement, which is still in its early stages, has become clear. The net total of investment funds committed to divesting from fossil fuels has already topped $6 trillion. The coal giant Peabody Energy, which filed for bankruptcy in April 2016, noted in a report to the U.S. Securities and Exchange Commission that divestment efforts could “adversely affect the demand for and price of securities issued by us, and impact our access to the capital and financial markets.”
The most important impact of the divestment campaign may be the long-term effect of stigmatizing fossil fuel companies. As McKibben notes, “What it will do is begin the process, further the process, of politically bankrupting them.”
A growing movement
The fossil fuel divestment movement has been gaining steam in recent years as a large number of high-profile pledges from faith-based organizations, philanthropic foundations, governments, educational institutions, pension funds, NGOs, corporations, and healthcare institutions have propelled the movement. Norway has pledged to partially divest fossil fuel investments from its massive $1 trillion sovereign wealth fund. In January, New York City Mayor Bill Di Blasio declared that his city would divest the city’s pension funds from the fossil fuel industry.
With the passage of this bill, Ireland has undergone a “seismic shift” to become a leader in climate action. This bill is a massive win for a growing movement that hopes to put an end to fossil fuel dominance.