The Rockefeller Foundation has announced that it will divest its $5 billion endowment of fossil fuels and will refrain from future investments in carbon-based energy.
Founded in 1913 by Standard Oil founder John D. Rockefeller, the foundation's original $100 million endowment was largely built from the proceeds of the company, which at one time controlled more than 90 percent of petroleum production in the United States. Under the new policy, the foundation's investment team is taking steps that will more than halve the foundation's exposure to fossil fuels to less than 1 percent in the near future.
A decade ago, the foundation made it a top priority to help end energy poverty and mitigate climate change impacts. According to the foundation, the endowment's exposure to fossil fuels has declined from 4 percent in 2014 to approximately 2 percent today (between 0.6 percent 0.7 percent in public commingled funds and 1.3 percent in fossil fuel private partnership interests).
"The endowment's total private fossil fuel exposure declined in recent years in part because of global energy transition trends and heightened sustainability risks in the sector," said Rockefeller Foundation CIO Chun Lai, who is responsible for managing the endowment, "but also because we actively narrowed the resources portfolio to less than a handful of managers who place strong focus on ESG [environment, social, and governance] integration and avoided dedicated investments in the heaviest emitting fossil fuels."
In October, the foundation announced a commitment of $1 billion over three years to help catalyze a more inclusive green recovery from the COVID-19 pandemic. This week, the organization is announcing a partnership with the U.S. International Development Finance Corporation to promote investment in distributed renewable energy (DRE), with a focus on delivering reliable, sustainable electricity in support of the global economic recovery from the COVID-19 pandemic.
"J.D. Rockefeller started this foundation to promote the well-being of humanity throughout the world, based on science and innovation. This is still our mission, and since the science is clear on the harm caused by fossil fuels, it was time that we officially aligned our internal investment strategy with our external values and mission," said Rockefeller Foundation president Rajiv J. Shah. "This new policy puts the Rockefeller Foundation in line with our sister organization, the Rockefeller Brothers Fund, and so many other courageous members of the Rockefeller family who have made the point that society needs to rethink growth capital and sustainability for the future. We're proud to follow in those footsteps."
(Photo credit: NYPL via Unsplash)