Over the last few years, churches, college endowments, pension funds, city governments, and others have pledged to sell a total of $50 billion in investments in coal, oil, and gas companies. Now the growing fossil fuel divestment movement has won its most symbolic victory yet: The heirs to John D. Rockefeller’s Standard Oil fortune committed to selling all of the fossil fuels holdings made by their $860 million charitable foundation.
The announcement comes as countries are set to meet at the United Nations this week to discuss a climate change treaty, as well as on the heels of the largest-ever climate protest, which took place in New York City over the weekend.
In a statement, the Rockefeller Brothers Fund, a foundation established in 1940 by the sons of Standard Oil’s founder and chairman, pledged to begin a two-step process to end its fossil fuel investments. The first, immediate phase will be focused on coal and tar sands, the two most controversial and riskiest fossil fuels; the second, on selling off all other fossil fuel holdings “as quickly as is prudent over the next few years.”
The move reflects momentum in the world of philanthropic foundations towards looking beyond grantmaking programs and considering large endowments as a tool in of itself for creating social change. The Rockefeller Brothers Fund, for example, cited its broader mission–which includes a focus on sustainable development–in making its decision to divest, as well as invest up to 10% of its portfolio in clean energy, energy efficiency, and other green companies.
The divestment movement today is biggest on college campuses, where campaigns are active at more than 300 schools around the country. At the People’s Climate March on Sunday, many of the estimated 50,000 students in attendance carried signs advocating the strategy. One of its biggest victories came in May, when Stanford University’s board voted to divest its $18.7 billion endowment from coal companies, though not all fossil fuels. However, other schools–notably Harvard University–have so far resisted large, well-organized student and faculty campaigns.
Critics of divestment say that even billion dollar endowments are a drop in the bucket, when considering the enormous market capitalizations of highly-profitable oil companies. But for investors, the strategy is more about investors’ spurring international debate and making a public statement, as well as limiting exposure to dirty fuels that are likely to become a bigger and bigger financial risk as the planet warms. As fund trustee Steven Rockefeller told the New York Times yesterday, “We see this as having both a moral and economic dimension.”