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Another Reason to Invest in Renewable Energy

Divestment Campaigns Swipe $2.6 Trillion from Fossil Fuels

Written by Jeff Siegel
Posted September 23, 2015

divestmentThe power of the “the people.”

The power of personal sovereignty.

The power of free markets and free will.

These are the things that offer the best hope for mitigating the threat of climate change, not mandates delivered by governments that subsidize fossil fuels – the largest source of man-made CO2 emissions.

The truth is, there are a number of ways the global community can act to counter fossil fuel dominance in absence of the government. One way is through fossil fuel divestment.

If you're unfamiliar with fossil fuel divestment, this was actually something that started back in 2011 by a group of climate advocates that decided to take a page out of the handbook of successful anti-war and anti-apartheid divestment campaigns from the past.

For them, there was a moral argument to be made for divesting from industries that are among the biggest sources of CO2 emissions. And so began a campaign that's grown quite rapidly over the past few years.

In fact, according to Arabella Advisors, the global fossil fuel divestment movement has topped $2.6 trillion. This is massive. Especially when you consider that just one year ago, that number was closer to $50 billion.

Much of this growth has come from faith-based communities, universities, foundations, and state and local governments. Just last month, in fact, the California General Assembly voted to divest its $476 billion public employee pension funds from companies that get at least half of their revenue from coal mining.

Whether or not you find the data and data analysis on climate change to be sound, there's no escaping the fact that fossil fuel divestment is gaining in popularity, and it is likely to continue to enjoy tremendous growth going forward.

A Renewable Energy Indicator

Now the question is, where is all this investment capital going?

More and more we're finding evidence to suggest that much is being funneled into renewable energy. As Arabella suggests, collectively, institutions committing to divest have also pledged to invest billions in climate solutions.

Those institutions and individuals that have pledged to both divest and invest in climate solutions collectively hold $785 billion in assets.

That's not chump change, and it further validates that the momentum behind renewable energy integration remains strong.

As an energy investor, it's important to look to the divestment movement as yet one more indicator of the strength of the renewable energy movement.

Love it or hate it, tomorrow's energy millionaires are today's renewable energy investors. And if you're smart, you have at least 50% of your energy portfolio dedicated to clean energy stocks. Some of my favorites right now are …

  • SunEdison (NYSE: SUNE)
  • SunPower (NASDAQ: SPWR)
  • First Solar (NASDAQ: FSLR)
  • Hannon Armstrong (NYSE: HASI)
  • SolarEdge (NASDAQ: SEDG)

And there are plenty more to come.

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