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Seventeen foundations announced their commitment to divest their stocks of fossil fuel companies Thursday, and pledged to invest in companies working in renewable energy, efficiency and other environmental causes.
The foundations, which together control about $1.8 billion in investments, have joined to form the Divest-Invest Philanthropy, an organization that includes groups such as the Ben and Jerry’s Foundation, the Park Foundation and the Wallace Global Fund.
Ellen Dorsey, Executive Director of the Wallace Global Fund, said on a press call Thursday that foundations face ethical as well as financial imperatives to divest their stocks of fossil fuel companies. The Wallace Global Fund’s main priority is environmental health, and that, coupled with the “readily available” and profitable investment opportunities in clean energy, made divestment a logical choice for the Fund, Dorsey said. The Fund’s portfolio is nearly 100 percent free of fossil fuel companies.
Dorsey said foundations have an opportunity to take the lead in the divestment movement, and that the Wallace Global Fund’s continued financial success makes it clear that companies and other foundations can follow its lead. Olivia Farr, Board Chair at the John Merck Fund, agreed with Dorsey — she said the John Merck Fund was about 97 percent divested from fossil fuels, with about 50 percent of that money reinvested in companies that better align with the fund’s mission and that help “fund the transition to a clean economy.”
“We can’t rely only on federal and state policies to enact change,” she said. “Voting with our dollars in the marketplace has become an increasingly useful tool. Together, we can send a strong message to the marketplace.”
Environmental organization 350.org has been leading the campaign for fossil fuel divestment since 2010, and so far, nine colleges, 22 cities and a number of religious institutions and other groups have pledged to divest. In October, Harvard made headlines when it chose not to divest its $30.7 billion endowment — the largest of any college in the U.S. — from fossil fuels. Harvard’s president claimed divestment would hurt the university financially and that university divestment as a whole “is likely to have negligible financial impact on the affected companies.”
But in spite of Harvard’s reluctance, a University of Oxford study last year found that the fossil fuel divestment campaign is growing faster than any previous divestment campaign, including campaigns against apartheid in South Africa, tobacco, and gambling. The study also found that even though divestment campaigns don’t often make a large direct monetary difference to the targeted industries, the attention the campaign attracts often results in reputation damages that can be financially significant.
“Stigmatisation poses a far-reaching threat to fossil fuel companies — any direct impacts of divestment pale in comparison,” Ben Caldecott, a research fellow at the University of Oxford and an author of the report told the Guardian. “In every case we reviewed, divestment campaigns were successful in lobbying for restrictive legislation.”