Foundations Held Returns Despite Dropping Fossil Fuels, Study Finds

Foundations Held Returns Despite Dropping Fossil Fuels, Study Finds

Foundations that have divested from fossil fuels have seen mostly positive impacts on their financial performance, a report from the Croatan Institute finds.

Since the launch of the DivestInvest movement in 2014, nearly two hundred foundations and philanthropic family offices have pledged to divest their assets, collectively worth $24 billion, from the largest oil-and-gas and coal companies listed on the Carbon Underground 200 list. According to the report, Divest Invest Philanthropy: Five Years After (44 pages, PDF), 94 percent of survey respondents said that the decision to drop the conventional carbon-intensive energy sector from their portfolios had had a "positive or neutral" impact on returns. The report also found that nearly all respondents (97 percent) now have 1 percent or less of their portfolio invested in fossil fuels, while two-thirds indicated that at least 5 percent of their portfolios were invested in climate solutions.

The report includes a case study focused on the experience of the Rockefeller Brothers Fund, one of the first high-profile philanthropies to commit to divesting a portion of its endowment from fossil fuels. Five years after the foundation made that decision, it reports that its investments have outperformed many market benchmarks. And despite the potential risks associated with a loss of portfolio diversification, the foundation also found that divestment from fossil fuels contributed to less volatility in its portfolio over time.

"New Report Shows Foundations Can Build Value Without Sacrificing Values." Rockefeller Brothers Fund Press Release 10/31/2019.