Yesterday the Pacific Institute for Climate Solutions released a report criticizing the fossil fuel divestment movement. While the report came a surprise, the arguments didn’t, especially given that they were based more on building a straw man to support the report’s conclusions than actually understanding the movement. At best the report fails to accurately reflect the demands and the theory of change of fossil fuel divestment movement, and at worst it fails to understand the true role and power of organizing, action and social movements.

The report gets a lot wrong and a little bit right, but most of its problems are undercut by three assumptions at the core of its argument – assumptions which seem to have been cherry-picked by the authors to support their own conclusions rather than reflecting those articulated by the movement. In fact the divestment movement has only ever been founded on one assumption that “if it’s morally wrong to wreck the climate, it’s wrong to profit from that wreckage”. The movement has been helped along by financial developments related the carbon bubble, the advent of reinvestment as a strategy and a slew of others. Still the core demand of the divestment movement remains for public institutions to divest from the top 200 fossil fuel companies.

The first “assumption” the movement is charged with is that divestment alone will keep carbon underground. Will one institution divesting do this? No, but dozens of public institutions refusing to do business with the world’s biggest fossil fuel giants will help build the political and moral will for governments and others institutions to leave fossil fuels in the ground. Take New Jersey based utility company NRG for example. NRG built itself on coal and in late in 2014 announced that it was seeking to cut 90% of its carbon emissions because they “don’t relish the idea that year after year we’re going to be graduating a couple million kids from college…that come out of college with a distaste or disdain for companies like mine.” This one single shift, a direct result of the divestment movement, will keep three billion metric tons of carbon in the ground.

This is just one example from a campaign that an Oxford University study found to be the fastest growing divestment movement in history. The same study, which looked at past divestment efforts found that “in every case [they] reviewed, divestment campaigns were successful in lobbying for restrictive legislation.” In other words, that while divestment may not itself leave carbon in the ground, it’s a tactic that will can play an integral role in forcing policy change to do just that.

PICS’s second assumption is that one can simply replace high carbon investments with low carbon alternatives. This is not a demand of the UBC divestment campaign, which the report uses as its case study. UBC’s campaign recognizes the divestment is not simple, which is why UBC campaigners are demanding first a freeze of new investments, then a five year divestment phase.

Even with this, many divested institutions have chosen to move faster and in doing so are driving fundamental shifts in the investment market. Investment managers like Canada’s Genus Capital are already managing tens of millions in fossil fuel free funds because their clients asked them to replace high carbon investments with low carbon ones. The Divest/Invest coalition the report cites is driving a new wave of impact investment into climate solutions alongside grassroots reinvestment efforts supporting frontline impacted communities to develop and build resilient climate solutions. Banks worldwide are rolling out fossil fuel free investment options because of popular demand (in part driven by the divestment movement). This undermines another of the report’s objections – the lack of easily divested options. The divestment movement is overcoming the very barriers the PICS authors claim to impede its success.

Finally, and falsely, the authors assert that the primary goal of divestment is to protect investors from the risk of the carbon bubble. Divestment is about organizing, building power and about bankrupting the reputation of the fossil fuel industry in order to revoke its political and social power. That said, when the top 200 fossil fuel companies were taken out of Standard & Poor’s S&P 500 and tested back over 10 years, it showed that the divested portfolio outperformed by an average of 30 basis points. Does this mean that divesting protects from the carbon bubble entirely? No, but it does point out that divesting from fossil fuels reducing an investor’s exposure to the volatility of the fossil fuel market, something the carbon bubble is sure to exacerbate. Of course, that’s just a bonus.

So why did they get things so wrong? The main reasons is probably that report demonstrates a near complete lack of understanding of social movements. While the report pays lip-service to the symbolic power of divestment, it shuffles it to the side failing to grasp that throughout history people powered social change has routinely been won through symbolic action. Take the Civil Rights Movement as an example. The overwhelming majority of campaigns were symbolic – were they to boycott buses, sit-in at lunch counters or take freedom rides across state lines. No one expected any campaign alone to achieve the visionary goal of ending racial oppression in the United States, but understood that with each campaign won the movement got one step further on the path to victory. Even in past divestment movements it was never the goal of campus divestment to bankrupt the South African Apartheid regime, but rather to morally bankrupt it in the eyes of the public to pave the way for greater change.

Divestment organizers recognize that this campaign is just one piece of a greater whole, another thing the report fails to grasp. Student divestment organizers believe so fervently that divestment alone is not enough than many spend hours working in other parts of the climate movement. They engage in electoral strategies, they support frontline communities, they intervene at international climate negotiations, they fight infrastructure projects near their homes and work to build renewable energy. Students organize iconic mass civil disobedience actions, like the student led XL Dissent action. Last September student divestment organizers recruited over 50,000 of their peers to march in New York City at the Peoples Climate March. In fact, the only people who seem to think that divestment exists in a bubble are the movement’s detractors.

The bottom-line is: if the strategies the PICS report outlines were going to work in a market and a political system controlled by the fossil fuel industry they would have already. Ignoring this fact is like trying to play checkers while your opponent is using a chess board. The game has been stacked against us and so we need to change the rules. To do that we have to take on cultural, political and economic power of the fossil fuel industry through organizing, mass action and campaigning. The fossil fuel divestment movement is one part of a climate movement that is finally doing just that and emerging with people power leading ahead of policy pontification. Hundreds of thousands of people around the globe are organizing and fighting for divestment because we need to rapidly and fundamentally change our energy system – and that’s something only a movement can do.


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