March 23, 2016; Reuters
In a letter posted on its website, the Rockefeller Family Fund announced on Wednesday that it would divest from fossil fuels “as quickly as possible,” eliminating its holdings in ExxonMobil Corp., which it called “morally reprehensible.” This is significant in that John D. Rockefeller Sr. made his money running Standard Oil, the company that evolved into ExxonMobil. Thus, by some lights, the fortune that the charitable fund is now divesting was made through that business. But another Rockefeller-associated foundation, the Rockefeller Brothers Fund, led the way down this path, divesting in September 2014.
We reprint the Rockefeller Family Fund’s statement in its entirety here:
The Rockefeller Family Fund is proud to announce its intent to divest from fossil fuels. The process will be completed as quickly as possible, as we work around the complications of modern finance, which is increasingly dominated by alternative investments and hedge funds.
While the global community works to eliminate the use of fossil fuels, it makes little sense—financially or ethically—to continue holding investments in these companies. There is no sane rationale for companies to continue to explore for new sources of hydrocarbons. The science and intent enunciated by the Paris agreement cannot be more clear: far from finding additional sources of fossil fuels, we must keep most of the already discovered reserves in the ground if there is any hope for human and natural ecosystems to survive and thrive in the decades ahead.
We would be remiss if we failed to focus on what we believe to be the morally reprehensible conduct on the part of ExxonMobil. Evidence appears to suggest that the company worked since the 1980s to confuse the public about climate change’s march, while simultaneously spending millions to fortify its own infrastructure against climate change’s destructive consequences and track new exploration opportunities as the Arctic’s ice receded. Appropriate authorities will determine if the company violated any laws, but as a matter of good governance, we cannot be associated with a company exhibiting such apparent contempt for the public interest.
To operationalize this decision, the Board has instructed its advisors, effective immediately, to eliminate holdings of ExxonMobil, and all coal, and tar sands-based companies outside the portions of the portfolio managed by third parties, and to keep exposures for these three categories of investment below 1 percent across the entire portfolio. The Family Fund’s Finance Committee will soon be entering the second phase of its divestment work, which will entail seeking suitable alternatives to certain commingled funds now held. The field of Socially Responsible Investing is dynamic and growing and we are confident that a variety of options will soon emerge for mid-sized endowments such as ours.
Needless to say, the Rockefeller family has had a long and profitable history investing in the oil industry, including ExxonMobil. These are not decisions, therefore, that have been taken lightly or without much consideration of their import. But history moves on, as it must. Indeed, it is past time for all people of good will to do everything in their collective power to make our new path one that recognizes the deep interdependence between humanity’s future and the health of our natural systems.
Exxon was unsurprised. “The Rockefeller Family Fund provided financial support to InsideClimate News and Columbia University Journalism School, which produced inaccurate and deliberately misleading stories about ExxonMobil’s history of climate research,” it declared. These stories led to an investigation by the New York Attorney General’s office, and now the California AG into whether Exxon had lied to and defrauded the public and shareholders.
Exxon claims those stories “wrongly suggested that we had reached definitive conclusions about the risks of climate change decades before the world’s experts and while climate science was in an early stage of development.”
For background on this issue, last year, Rick Cohen wrote an excellent article documenting and calling out the generally very slow movement of foundations toward the embrace of mission-related investments.—Ruth McCambridge