Climate Action
Divesting from the Past, Investing in Tomorrow
September 26, 2025
Divestment is the act of selling off shares or other investments in a company for a financial, political, or ethical reason. Divestment campaigns have a long history of success, such as the student-led divestment movement against the South African apartheid government in the 1970s and 1980s. Apartheid was a system of government-sanctioned racial segregation that saw the minority white population of South Africa suppress the rights and liberties of the majority Black population.
Students across the world advocated against university investments in corporations with ties to apartheid South Africa. Hampshire College, Massachusetts, was among the first U.S. colleges to divest from companies tied to apartheid South Africa, following intense student activism and administration negotiations. By 1988, 155 U.S. universities had divested at least partially from companies linked to the apartheid regime.
Similarly fossil fuel divestment is the act of selling stocks, bonds, or other investment funds that relate to fossil fuels, be it coal, oil or gas. Fossil fuel divestment is grounded in the recognition that the burning of fossil fuels is the primary driver of climate change. Given this reality, it seems reasonable to ask universities, governing bodies, financial institutions, and philanthropic organizations to reallocate their fossil fuel investments towards renewable energy investments instead.
According to the Global Fossil Fuel Divestment Commitments Database, the approximate value of the fossil fuel assets that organisations and institutions have divested from as of October 2021 is $40.76 trillion across 1,667 institutions. This symbolizes the growing recognition that backing the fossil fuel industry is both financially and morally unsustainable.
Higher Education: Where the Movement Began
Since universities have long been a place for political activism it should not be a surprise that calls for fossil fuel divestment at colleges and universities is growing, based on their moral responsibility to utilize their endowments to best benefit the future of their students. Additionally, student movements have frequently brought attention to the climate change crisis and worked to stigmatize the actions of the fossil fuel industry.
The fossil fuel divestment movement was born at Swarthmore College, outside of Philadelphia, in the early 2010s. Hampshire College, again, and Unity College, Maine in the winters of 2011 and 2012, became the first colleges in the U.S. to fully divest from fossil fuels. Hampshire’s endowment is just under $50 million and had just under 3 percent invested in fossil fuel companies prior to divestment. At the time of their divestment commitment, Unity College’s endowment was $13.5 million, with a 3 percent exposure to big energy.
There are currently at least 250 educational institutions that have committed to some form of divestment. Of the divestment commitments reported in the Global Fossil Fuel Divestment Commitments Database, educational institutions make up 16% of those divesting from fossil fuels — the second-largest category by sector after faith based organizations. Faith groups comprise nearly 36% of all institutions to have divested and under Pope Francis, the Vatican repeatedly urged Catholics to disinvest from fossil fuels. At least 384 institutions that have pledged to divest are known to be Catholic.
Three notable higher education institutions who have made divestment commitments and as a result headlines are Harvard University, Boston and the University of Oxford, and Cambridge University in the United Kingdom. They are some of the most prestigious universities in the world.
After a nearly 10-year long campaign, in 2021 Harvard University announced its decision to allow investments in the sector to expire. As of 2024, Harvard’s endowment’s investments in fossil fuels had fallen below 2 percent, with Harvard on track to fully divest from the industry by 2050. Notably, Harvard has simultaneously invested in technologies that accelerate the low-carbon transition, demonstrating how divestment can align with strategic reinvestment.
The University of Oxford announced its plans to divest its endowment from the fossil fuel industry in April 2020, noting the growing threat of climate change. Cambridge University adopted a moratorium on new funding from fossil fuel companies in 2024. The university plans to divest from all direct and indirect investments in fossil fuels by 2030.
However, many more colleges have yet to act. For example, the University of Pittsburgh, Pennsylvania, has not yet fully divested from fossil fuels. Their Board of Trustees committed in 2021 to phasing out private fossil fuel investments by 2035 but continues to hold about 8.1% of its endowment in fossil fuels as of 2022. Other major universities including Yale, Notre Dame, and Columbia have all been criticised for not fully divesting from fossil fuels, and the University of Texas, Austin, has not confirmed a full divestment plan.
Government and Financial Leadership
Having said that, the global move for divesting from oil, coal and gas is growing and its influence extends far beyond college and university campuses. Governing bodies and major financial institutions have also begun recognizing both the risks and opportunities inherent in fossil fuel investments.
New York City was an early municipal leader, with its pension funds becoming the first major city pension fund to adopt fossil fuel divestment policies and divesting from fossil fuel reserve owners in 2018. In 2021, the boards of the New York City Employees’ Retirement System and the New York City Teachers’ Retirement System voted to approve fossil fuel divestment. In 2023, New York City voted to exclude upstream fossil fuel investments across private markets holdings.
Coutts — the private bank of the British royal family — has committed to dropping investments in oil sands (also known as tar sands), Arctic oil and gas exploration, and thermal coal extraction and generation. They pledged to reduce the carbon intensity of their holdings by 25% in 2020 and aim for further reductions as part of their broader responsible investing strategy. Coutts excludes companies deriving more than 5% of their revenue from oil sands and Arctic exploration, reflecting their exclusion policy on extreme fossil fuels.
The British royal family’s private bank is not the only major financial institution to pledge fossil fuel divestment. In 2019, Norway’s parliament voted plans into law for the Norwegian Sovereign Wealth Fund — the world’s largest sovereign wealth fund — to drop investments in eight coal companies and approximately 150 oil producers. Additionally, La Banque Postale, a French bank, committed to a complete withdrawal from fossil fuels (oil and gas) by 2030.
Philanthropic Foundations
Philanthropic foundations represent 11.5% of all institutions reported as divesting in the Global Fossil Fuel Divestment Commitments Database — the third-largest category by sector. Institutions focused on social good cannot simultaneously profit from activities that undermine their charitable missions.
In 2021, the Ford Foundation announced that their endowment would not invest in any fossil-fuel-related industries going forward, with the dual strategies of firstly committing to not doing harm and secondly, looking for opportunities to invest in the renewable sector. Rockefeller Brothers Fund pledged in 2014 to divest from fossil fuels through a two-step process, citing the moral tension present in climate change and fossil fuel investments. By 2024, their total fossil fuel exposure was less than 0.2 percent.
The MacArthur Foundation, in 2019, ceased new investments in private funds that invest in oil and gas exploration, and in 2021 they adopted an index that excludes companies with fossil fuel reserves. This makes them the largest foundation to move money away from the oil and gas sector.
Invest in Renewable Energy
The fossil fuel divestment movement proves that when institutions align their investments with their values and the scientific reality of climate change, they can drive change while protecting their financial interests. Simultaneous investment in the growing renewable energy makes their actions even more influential.
In 2024, the renewable energy sector, worldwide, was worth $1.51 trillion and is projected to grow 14.9% annually from 2025 to 2030. So there is a strong economic case for backing renewable energy investment – that includes job creation, energy security, economic growth, and technological advancements.
EARTHDAY.ORG is calling for renewable energy generation, globally, to be tripled by 2030. The growth of renewable energy transcends economic systems, political borders and political parties, and demonstrates its universal appeal. Sign our renewable energy petition to call on global leaders to expedite an equitable transition to renewable energy.
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