Rockefeller fund to divest fossil fuels holdings

Market: Coal, Crude oil, Emissions, Natural gas, Oil products
22/09/14

A philanthropic fund founded by the heirs to a creator of the modern oil industry will begin to divest itself from fossil fuel-related businesses.

Rockefeller Brothers Fund, a 74-year-old, $860mn fund started by the grandsons of Standard Oil founder John D. Rockefeller, said today it will begin a two-stage process of removing fossil fuels-tied investments from its portfolio.

By the end of the year the fund hopes to reduce exposure to coal and oil sands-related businesses to less than one percent of the portfolio. A further divestment from investments tied to other fossil fuels will happen over the next few years.

The fund said the divestment stems from its commitment to fighting climate change. The announcement was timed to come a day before the United Nations Climate Summit being held in New York City tomorrow.

Standard Oil, founded in 1870, grew to be the largest corporation in the world with operations in crude oil production, refining and marketing. It was broken up in 1911 after the US Supreme Court ruled it was an illegal monopoly under the Sherman Antitrust Act. The forced break-up of the company created 33 separate companies, parts of which continue today. Standard Oil of California and Standard Oil of New Jersey were precursors to the company that is now ExxonMobil.

The movement to encourage universities and philanthropic funds to divest from fossil fuel-related industries has had limited success. Stanford University said in May it would remove coal industry stocks from its endowment in response to student demands, but it was seen largely as a symbolic gesture since coal is a small part of the school's endowment. Yale University said it would take a close look at fossil fuel divestments, but the largest US college endowment, Harvard University's, said it will not. Last week the University of California's board of regents said it would not divest from fossil fuels but plans to invest $1bn over the next five years in renewable energy, energy efficiency and sustainable agriculture.

The Rockefeller Brothers Fund does not have the same fiscal responsibilities as university endowments, but aims to maintain a base of funds large enough to support its charitable grants and awards. In 2012, the latest year of published financial information for the fund, there was $1.4mn in investment income and $14.3mn in direct charitable spending.

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Rockefeller fund to divest fossil fuels holdings

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