Can we still make a reasonable return without investing in fossil fuel companies?

Can we still make a reasonable return without investing in fossil fuel companies?

A:

While it’s true that fossil fuel companies are extremely profitable (In 2011, the top five oil companies made $137 billion in profit — that’s $375 million per day), they’re also very risky investments (1). Coal, oil, and gas companies’ business models rest on emitting five times more carbon into the atmosphere than civilization can handle, which makes their share price five times higher than it should be in reality. In addition, disasters like Exxon Valdez, the BP oil spill, along with massive fluctuations in supply and demand of coal, oil, and gas, make energy markets particularly volatile, and therefore risky.

Report after report has shown that investing in clean energy, efficiency, and other sustainable technologies can be even more profitable than fossil fuels (2). It’s a growing market, with over $260 billion invested globally in 2011, and a safe place for your institution to invest (3).

There are also a number of ways to re-invest locally that help build your community and stimulate good jobs. Projects like energy efficiency and rooftop solar have high up-front and labor costs, but save institutions money in the long run because electricity, heating, and other costs are reduced significantly.  

(1) http://www.ceres.org/resources/reports/sustainable-extraction-an-analysis-of-sec-disclosure-by-major-oil-gas-companies-on-climate-risk-and-deepwater-drilling-risk/view

(2) http://www.forbes.com/sites/mindylubber/2012/03/20/investors-are-making-money-on-renewable-energy/

(3) http://www.reuters.com/article/2012/01/12/us-clean-tech-investment-idUSTRE80B1NX20120112

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