The Rockefeller Family Fund—yes, those Rockefellers—just announced that it’s divesting from fossil fuels, saying “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.”
The nonprofit trust, which has a $130 million endowment devoted largely to grants for environmentalism, women’s rights, and civic watchdogging, was borne of the fortune of John D. Rockefeller, one of America’s original oil barons and among the wealthiest men in history. Those ties lend special weight to the decision not only to divest, but to use the occasion to issue a stinging rebuke against ExxonMobil, which is under investigation for allegedly hiding the risks of climate change from investors and the public. The oil giant descends directly from Rockefeller’s Standard Oil Company.
“We would be remiss if we failed to focus on what we believe to be the morally reprehensible conduct on the part of ExxonMobil,” the Rockefeller Family Fund said in a statement (full text below). “… 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.”
Exxon disputed the fund’s characterization of its conduct.
“It’s not surprising that they’re divesting from the company since they’re already funding a conspiracy against us,” the oil company said in a statement, noting that the fund provided financial support to an investigative journalism project that raised questions regarding the company’s record of disclosures about its climate-change research.
This isn’t the first time the Rockefeller family has made waves for its investment decisions: In 2014, the Rockefeller Brothers Fund, which is separate from the Rockefeller Family Fund, announced that it was joining a campaign to withdraw $50 billion from fossil-fuel investments worldwide.
The director of the Rockefeller Family Fund, Lee Wasserman, told Quartz that currently, 6% of the portfolio is in fossil-fuel investments. The trust already has divested its direct stake in Exxon, along with its direct investments in coal and tar-sands companies, he said. It has now instructed third-party managers to keep the fund’s indirect holdings of these kinds of investments below 1% of the total portfolio.
Any proceeds from the liquidation of fossil-fuel investments will be rerouted into “suitable alternatives” in the socially responsible investing space, the fund said.
The full text of the Rockefeller Family Fund’s statement is below:
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.
And here is the full text of ExxonMobil’s response:
It’s not surprising that they’re divesting from the company since they’re already funding a conspiracy against us. 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. The 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. ExxonMobil believes the risk of climate change is clear and warrants action. ExxonMobil is taking action by reducing greenhouse gas emissions in its operations, helping consumers reduce their emissions, supporting research and participating in constructive dialogue on policy options.
InsideClimate News clarified that the Rockefeller Family Fund’s support was for general purposes and received after the organization had begun its Exxon reporting.
Updated March 23 at 5:15pm ET to add a response from ExxonMobil.
Updated March 24 at 3:50pm ET to add a response from InsideClimate News.