NEW YORK, New York, March 30, 2106 (ENS) – The Rockefeller Family Fund expressed today its intent to divest from its investments in fossil fuels. At the same time, the Fund blamed the largest U.S. petroleum company, ExxonMobil, for “morally reprehensible conduct.”
“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 Fund said in a statement.
“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,” the Fund said.
“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,” said the Fund.
Last November, the State of New York opened an investigation into whether ExxonMobil had misled the public and investors about the risks of climate change. A parallel inquiry is ongoing in California.
The Rockefeller Fund’s 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. The Fund said it will keep exposures for these three categories of investment below one percent across its entire portfolio.
“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 Fund said.
“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,” according to the Fund.
ExxonMobil blamed the media for the decision of Rockefeller Family Fund to divest.
“It’s not surprising that they’re divesting,” the company told CNBC. “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.”
InsideClimate News, which received a $25,000 grant from the fund in July of last year, published a series of reports on Exxon’s early research into climate change. The “Los Angeles Times” later published articles based on reporting by Columbia’s Graduate School of Journalism addressing Exxon’s climate change history.
Rockefeller Family Fund Director Lee Wasserman said the charity supports public interest journalism, including InsideClimate News, but keeps at arm’s length from the work being done.
“We first learned about it when everybody else read about it,” Wasserman said. “The information that was unearthed was stunning and struck us as beyond the pale of what a corporation interested in protecting the public interest would do. … As a matter of good governance, we felt it imperative to sever our tie with the corporation.”
Meanwhile, the Securities and Exchange Commission has ruled that ExxonMobil must allow shareholders to vote on at least two resolutions on climate change at its May 25 annual general meeting.
One resolution calls on ExxonMobil to take moral responsibility for climate change and adopt a policy to limit average global temperature increases.
A second would require the oil company to explain how its business would be affected by the worldwide commitment to limiting climate change.
“The SEC has rejected Exxon’s attempt to silence investors’ concerns about growing financial risks associated with climate change trends, including escalating global demand for low-carbon energy,” said Shanna Cleveland, a senior manager at Ceres, a Boston nonprofit that coordinates action on issues important to many of the nation’s largest institutional investors.
Exxon declined to comment on the SEC rulings.
The SEC rulings override Exxon’s attempt to block the shareholder resolution calling for the company to assert moral leadership on climate change and pledge to work toward limiting global warming to 2 degrees Celsius or less. It is sponsored by 34 shareholder groups under the umbrella of the Interfaith Center on Corporate Responsibility.
“For the first time ExxonMobil shareholders will grapple with the moral and justice implications of climate change, as related to the company’s business,” said Susana McDermott, director of communications for the Interfaith Center.
The Rockefeller family’s wealth is founded on the activities of oil tycoons John D. Rockefeller and William Rockefeller, co-founders of Standard Oil.
The Fund was founded in 1967 by members of the Rockefeller family’s fourth-generation.
In its announcement, the Fund acknowledged that this divestment means a major change in direction for the family’s investments.
“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,” said the Fund in its announcement. “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.”
The Family Fund’s Finance Committee seek suitable alternatives to its fossil fuels investments. 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.
“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,” said the Fund.
Since 1967, the Fund has worked at the forefront of advocacy in such areas as environmental protection.
Beginning with John Sr., the family has been a major force in land conservation, creating more than 20 national parks and open spaces, including the Cloisters, Acadia National Park, Forest Hill Park, the Nature Conservancy, the Rockefeller Forest in California’s Humboldt Redwoods State Park and Grand Teton National Park, among many others.