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Universities and cities have (rightly) been the target of high-profile divestment campaigns to stop putting pension money into fossil fuels. Our personal savings are tiny compared to, say, the New York pension fund.
But our paychecks, retirement nest eggs, and savings accounts are still almost certainly helping drive climate change by being invested in fossil fuel projects. While activists aren’t going to stage a protest outside your house to divest your saving account from Big Oil anytime soon, if you want to do so, you can. There are concrete steps you can take to get your money away from dirty fuels.
“When we come together to take collective action to say we’re not going to stand for certain behaviors, that’s when real change happens,” said Lindsay Meiman of 350.org. “Divesting and no longer doing business with companies that are continuing to wreck the climate sends a really strong signal around the world that it’s no longer acceptable to do business with fossil fuel companies.”
There’s a growing movement of people who are agitating for individuals to get their financial house in order. And there’s honestly a pretty solid financial argument to get out of fossil fuels now before the industry goes belly up. Contrary to popular belief that eco-friendly initiatives don’t make money, analyses show that funds separated from fossil fuels actually perform as well or better than the oily ones. As the world evolves away from dirty energy, it makes sense to move your money off a sinking ship before it goes completely under.
“The extractive economy is going away,” said Andy Behar, the CEO of nonprofit As You Sow. “These companies are going to be winding down. You really don’t want to be holding them in your 401k plan. You’re going to be left holding the bag — the big money people aren’t getting involved.”
If you’re like me, you have only a vague sense of where exactly your money lives. I’ve got a checking and savings account at Bank of America that I opened in college, as well as a Chase credit card (also known as JP Morgan Chase). I’ve also got a 401k through my job and a second Roth retirement fund I opened through my Bank of America account. But if you quizzed me, I couldn’t tell you what, exactly, all those money pots themselves are invested in—especially my 401k, which I haven’t thought about since I selected the default option when I set it up years ago.
Behar assured me that I’m not out of the ordinary for knowing next to nothing. “You’re very typical,” he said. “You’re like the 100 million people who own $10 trillion in assets in a retirement plan with a company. The system is designed to keep you from knowing—it is very difficult to learn what is inside your investments. Most people have no idea.”
Behar told me about the meeting he’d just had with the Department of Labor to discuss the three mutual funds the federal government’s 30 million employees are given as a default investment option. “Let’s just put it this way: The Surgeon General owns tobacco stocks, and he doesn’t have a clue,” he said. “Everyone in the U.S. government owns weapons, private prisons, and Big Oil.”
It’s extraordinarily difficult, if not impossible, to figure out all by yourself which of the funds your 401k has invested your money in also support pipelines, or if your bank is involved in destroying the Amazon. Fortunately, a number of activist groups and nonprofits have begun maintaining resources for more financial clarity.
The Rainforest Action Network releases an annual report documenting how the world’s biggest banks are involving themselves in funding fossil fuel and deforestation. BankTrack, an international NGO, also maintains an exhaustive database of international banks and their “dodgy deals” (which often include fossil fuel projects). Behar’s group, meanwhile, has a tool where you can look up funds from your retirement or other investment accounts by their name, manager, or ticker number. The database gives details about the fund’s investment in different fossil fuel categories (coal, oil and gas, and utilities) and an overall letter grade.
The first step in divestment could be as easy as switching your checking and savings account from a bank that gives a big thumbs-up to fossil fuels to one that doesn’t. If you’re banking with a big-name, international bank, Meiman said, you can pretty much bet they’re supporting dirty projects. But, she said, “it’s easier than ever to find a bank that doesn’t create and perpetuate this system.”
I’m in New York, so Behar recommended I check out Amalgamated Bank, the biggest union-owned bank in the country, which has pledged not to lend to fossil fuel companies. Meiman, meanwhile, banks with Aspiration, a digital bank that bills itself as a “clean money” bank; she recommended looking into digital banking options, which tend to be consumer-focused (just make sure they’re not owned by a JPMorgan or a TD Bank). Community banks, which are usually focused more on investing locally and less about providing support and loans for international corporate projects, are also a better choice than a larger bank for making sure your money stays out of the pockets of big international fossil fuel companies.
When it comes to your 401k and other retirement savings, that can get a little trickier but also yield larger results. If you get your 401k through your work, Behar recommended talking to fellow employees, including your 401k administrator, about figuring out a way to move your company away from dirty funds. “That person is invested in the same funds as you are, and they’d probably be just as horrified to see what’s going on,” he said. Organizing at your company to divest from a dirty 401K is a way to move even more money out of the fossil fuel industry’s hands. (If you manage your own funds, you can use tools like As You Sow’s to take a closer look at what’s going on under the hood and make choices accordingly.)
Meiman’s group is part of a coalition that’s cranking up the heat on banks for funding fossil fuel projects. Joining in, especially if you still want to bank with one of the big ones for whatever reason, is a great way to exert pressure. (If you need proof these campaigns work, look at what happened with Arctic oil and gas financing last year.)
Finally, if you own stock and enjoy a bit more hands-on management or involvement in the market, Behar said it’s important to remember that you have a voice in that company as a partial owner—and to not forget to participate in shareholder votes (usually by requesting proxy materials through the bank you use). Exxon and Chevron just had major shareholder revolts that could push the companies to clean up their act, showing once again that the power of collective action can yield results even if you don’t want to let go of your fossil fuel holdings just yet.
“People need to understand how much power they have as a shareholder,” said Behar.
Correction 10/4/21 6:21 A.M. ET: This post has been updated to correct the spelling of Lindsay Meiman’s name.