NYT: “The family whose legendary wealth flowed from Standard Oil is planning to announce on Monday that its $860 million philanthropic organization, the Rockefeller Brothers Fund, is joining the divestment movement that began a couple years ago on college campuses.”
“The announcement, timed to precede Tuesday’s opening of the United Nations climate change summit meeting in New York City, is part of a broader and accelerating initiative.
In recent years, 180 institutions — including philanthropies, religious organizations, pension funds and local governments — as well as hundreds of wealthy individual investors have pledged to sell assets tied to fossil fuel companies from their portfolios and to invest in cleaner alternatives. In all, the groups have pledged to divest assets worth more than $50 billion from portfolios, and the individuals more than $1 billion, according to Arabella Advisors, a firm that consults with philanthropists and investors to use their resources to achieve social goals.
The people who are selling shares of energy stocks are well aware that their actions are unlikely to have an immediate impact on the companies, given their enormous market capitalizations and cash flow.
….Ultimately, the activist investors say, their actions, like those of the anti-apartheid divestment fights of the 1980s, could help spur international debate, while the shift of investment funds to energy alternatives could lead to solutions to the carbon puzzle.
“This is a threshold moment,” said Ellen Dorsey, executive director of the Wallace Global Fund, which has coordinated the effort to recruit foundations to the cause. “This movement has gone from a small activist band quickly into the mainstream.”
….At the Rockefeller Brothers Fund, there is no equivocation but there is caution, said Stephen Heintz, its president. The fund has already eliminated investments involved in coal and tar sands entirely while increasing its investment in alternate energy sources.
Unwinding other investments in a complex portfolio from the broader realm of fossil fuels will take longer. “We’re moving soberly, but with real commitment,” he said.
Steven Rockefeller, a son of Nelson A. Rockefeller and a trustee of the fund, said that he foresees financial problems ahead for companies that have stockpiled more reserves than they can burn without contributing significantly to climate damage. “We see this as having both a moral and economic dimension,” he said.
Activism to divest from fossil fuel companies began on college campuses, but the record of success there has been mixed.
The university with the biggest endowment, Harvard, has declined to divest, despite pressure from many students and outside organizations.
Drew Gilpin Faust, Harvard’s president, has issued statements that she and her colleagues do not believe that divestment is “warranted or wise,” and argued that the school’s $32.7 billion endowment “is a resource, not an instrument to impel social or political change.”
Stanford recently announced it would divest its holdings in the coal industry; Yale University’s investment office asked its money managers to examine how its investments affect climate change and to look into avoiding companies that do not take sensible “steps to reduce greenhouse gas emissions.” The announcement did not satisfy students pressing for divestment.
“I don’t think that anyone who favors divestment is arguing that the institutions’ sale of the fossil fuel company stock is going to have much impact, if any, on either the stocks or the companies themselves,” he said, since the market capitalizations of the companies is immense.
….Pension funds have proved a harder sell. While Hesta Australia, a health care industry retirement fund worth $26 billion, announced last week that it would get out of coal, many others have not. PensionDanmark said in a statement that it has invested 7 percent of its $26 billion portfolio in renewable energy with plans to raise that percentage over time. “Divestment will itself not contribute to solving the challenges of global climate change, and we believe it is not a very wise way to try and solve the issue,” the company said.”
FT: “….Stephen Heintz, the fund’s president, suggested that the oilman who founded Standard Oil in 1870 would approve and would be “leading the charge” into renewable energy if he were alive today.
“He was an innovative, forward-looking businessman,” Mr Heintz said. “He would recognise that clean energy technology is the business of the future.”
….Mr Heintz acknowledged that his fund’s holdings were not very large but said that selling them would send a “signal” about its views on the future of energy. “The science is crystal clear” on climate change, he said. “We’ve just got to leave the bulk of the remaining fossil fuels in the ground.”
….There is no robust evidence that divestment campaigns have any impact on share prices, and the effects, if any, are likely to be more significant for small coal companies than for ExxonMobil, which has a market capitalisation of $412bn.
Mark Fulton of the Carbon Tracker Initiative, a think-tank that works on investment and climate change, said he expected divestment to encourage companies that retained their shares to engage with managements. “It will gather pace – it’s like a ball rolling downhill,” he said.”
Future Today
