Rockefellers Divest From Fossil Fuels
By Michael Schweibinz
The entirety of the eco-conscious world has now turned its attention toward the United Nation’s Climate Change Summit, which commenced on September 23, 2014. However, for many, climate change calls were already answered the day before, when the Rockefeller family, whose fortune was made in oil in the late 1800s, announced that they would divest their investment assets tied to fossil fuels.
The $860 million Rockefeller Brothers Fund is joining forces with many investment groups that have begun to withdraw investments in fossil fuel extraction companies. Equally as important, they are reallocating the capital that comes out of fossil fuels into renewable energy and other clean tech companies.
The Wallace Global Fund and Arabella Advisors are two financial consultants that advise investment organizations like the Rockefeller Brothers Fund. Arabella helps investors achieve not only monetary, but also social success with their investments. The firm has announced that over $50 billion in assets have been pulled from fossil fuel dependent companies and will be reinvested in cleaner alternatives.
Although these investors and philanthropists are aware that their divestment actions will not make immediate changes in the landscape of cleaner energy, they are insistent that over time, refocusing investment strategies away from fossil fuels and toward clean, renewable energy will be pivotal in creating a more sustainable future. Valerie Rockefeller Wayne, heir and trustee to the Rockefeller Brothers Fund, admits that her family’s goal is not only long-term, but intergenerational as well. She explains that her eight-year-old daughter is already well educated on the depletion of orangutan habitat for the planting of palm oil trees.
The Rockefellers join many other investing and philanthropic groups such as universities, religious groups, and over 100 First Affirmative clients in divesting from fossil fuel extraction companies and reallocating investment assets to companies of the future. Actor Mark Ruffalo is one of many individual investors who announced that he would adopt a fossil fuel free investment approach. Archbishop Desmond Tutu created a video stating that “because climate change has a disproportionate impact on the poor, it is the human rights challenge of our time.”
Others do not share such a humanitarian view on this topic. Torben Morger Pederson, the chief executive for PensionDanmark, which has only 7% of its $26 billion investment portfolio in renewable energy, remarked that “if the returns from a traditional carbon-based power plant and a wind farm were equal, the fund would invest in the wind farm.” As they are not, however, he claims that “we are not missionaries” and will continue to invest for the sake of profitability.
However, when a distinguished family like the Rockefellers with its family history so deeply rooted in the oil business makes such a momentous financial decision, it’s likely that many others will follow suit. And as an increasing number of individuals and institutions divest, those who hold fossil fuel related assets may eventually be negatively impacted. The Rockefellers have helped to publicize the divest/reinvest movement, which will likely continue to alter the behavior of other individual and institutional investors.
Mention of specific companies or securities should not be considered an endorsement or a recommendation to buy or sell that security. Past performance is no guarantee of future results.
PHOTO: Peter O’Neill, head of the Rockefeller family and great-great-grandson of John D. Rockefeller, along with Neva Rockefeller Goodwin (second from the right, great-granddaughter of John D. Rockefeller), and Stephen B Heintz, president of the Rockefeller Brothers Fund. Photograph by Brendan McDermid, Reuters.
Posted: September 29, 2014