Jim Suhr/File/AP

Rockefellers and others annouce $50 billion divestment from fossil fuels

Hundreds of individuals, cities, institutions have joined movement aimed at orchestrating end of fossil fuel era

A philanthropic organization of the Rockefeller family, along with a coalition of hundreds of other institutions and individuals, have announced a total of $50 billion in divestments from the fossil fuel industry amid efforts to fight climate change, according to a report released Monday.

Stephen Heintz, head of the foundation started by John D. Rockefeller — who made his fortune in oil in the early 20th century — said he believed the divestment would be in line with the oil tycoon’s business sense. “We are quite convinced that if he were alive today, as an astute businessman looking out to the future, he would be moving out of fossil fuels and investing in clean, renewable energy,” said Heintz.

The divestment announcement by the Global Divest-Invest Coalition came a day before world leaders gather at the United Nations Climate Summit in New York City to pledge actions meant to avoid the worst effects of global warming. It followed a global climate protest by hundreds of thousands of people around the world Sunday, with demonstrators calling on their governments to take action.

The fossil fuel divestment coalition began with just a handful of universities and foundations and has grown to 180 institutions and local governments as well as 654 wealthy individuals, according to a report by Arabella Advisors, an organization working with the global fossil fuel divestment coalition.

“It was born in 2011 on just half a dozen college campuses where the students called on their administrations to divest endowments from coal and other fossil fuels,” the report said. “Since January 2014, the number of commitments by campuses, churches, cities, states, hospitals, pension funds and other institutions — both in the United States and abroad — have more than doubled, from 74 to 180.”

Most of the total $50 billion in divestments was pledged by local governments such as Eugene, Oregon; Ithaca, New York; and Seattle and by educational institutions such as Stanford University, the report said.

Philanthropic foundations like the Rockefeller Brothers Fund accounted for 8 percent of the divestments, followed by high-wealth individuals, faith-based organizations, nongovernmental organizations and health care institutions, the report added.

The standard divestment pledge includes an agreement not to make new investments in the top 200 oil, gas, or coal companies. It also includes a pledge to sell any assets tied to those investments within three to five years and to invest in green energy companies.

“The snowball is picking up speed very rapidly,” Ellen Dorsey, executive director of the Wallace Global Fund and founder of the Divest-Invest Initiative, told The San Jose Mercury News. “There’s a new urgency imposed by the science. We have to orchestrate the end of the fossil fuel era in a very short time frame.”

While activists said the growing movement could result in making investments in fossil fuels appear too risky, others argue that the total divestment amount is small compared with the total value of the industry, estimated at $4.65 trillion, according to a report by research and analysis company Bloomberg New Energy Finance.

Some critics have said that the divestment campaign is hampered by a focus on publicly traded securities such as stocks and bonds while most of the industry's investment takes place on private markets. 

But the originator of the initiative argued that the purpose of the divestments was not to put fossil fuel companies out of business but to “raise the specter of the financial risks and to compel ethical action,” Dorsey told The National Journal on Sunday.

In June, New York’s Union Theological Seminary voted unanimously to become the world’s first seminary to begin divesting fully from fossil fuels, eventually taking with it the school’s $108.4 million endowment and calling the world’s addiction to oil "profoundly sinful." It said it joined more than 100 religious institutions, universities, cities, counties and other organizations in divesting. 

In addition to ethical concerns, some recent reports have focused on the economic costs of climate change. In June a bipartisan study said the effects of global warming could cost the U.S. hundreds of billions of dollars.

The Arabella Advisors report concluded that "it is time for all American business leaders and investors to get in the game and rise to the challenge of addressing climate change."

In a separate development, almost 350 global investors — with assets totaling over $24 trillion — have called on governments to phase out subsidies to fossil fuel industries, The Los Angeles Times reported Sunday.

“Investors are owners of large segments of the global economy as well as custodians of citizens’ savings around the world,” The Los Angeles Times quoted Achim Steiner, U.N. undersecretary-general and executive director of the U.N. Environmental Program, as saying. “Having such a critical mass of them demand a transition to the low-carbon and green economy is exactly the signal governments need in order to move to ambitious action quickly.”

With wire services

Related News

Find Al Jazeera America on your TV

Get email updates from Al Jazeera America

Sign up for our weekly newsletter

Get email updates from Al Jazeera America

Sign up for our weekly newsletter