Sunset. Photo by: Rhett A. Butler.
In 1870, John D. Rockefeller founded the Standard Oil Company. Rapidly becoming the world’s largest oil refiner, Standard made Rockefeller a billionaire and one of the world’s greatest philanthropists. A hundred and forty-four years later and John D. Rockefeller’s descendants have announced they are stripping fossil fuels from the Rockefeller Brothers Fund, a private charity with around $860 million in assets, due to the rising threat of global warming.
“John D. Rockefeller, the founder of Standard Oil, moved America out of whale oil and into petroleum,” Stephen Heintz, president of the Rockefeller Brothers Fund, said in a statement today. “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.”
To date the global divestment movement has largely attracted colleges, churches, pension funds, and environmental groups. With the Rockefeller decision, however, it moves one step closer to the mainstream of global financing.
“The [Rockefeller Brothers Fund] has begun a two-step process to divest from investments in fossil fuels, first focusing on limiting its exposure to coal and tar sands, with a goal to reduce these investments to less than one percent of the total portfolio by the end of 2014,” reads a statement form the charity. “The Fund is also analyzing in detail its remaining fossil fuel exposure and will develop a plan for further divestment as quickly as is prudent over the next few years.”
John D. Rockefeller shortly after founding Standard Oil. By: Unknown/Public Domain.
In addition to this the Rockefeller Brothers Fund is already investing 10 percent of its asset on “clean energy technologies and other business strategies that advance energy efficiency, decrease dependence on fossil fuels, and mitigate the effects of climate change,” according to the group.
Despite being only a few years old, the divestment campaign has stripped fossil fuel from around $50 billion in assets across 800 groups. Yet the movement doesn’t believe it will injure the fossil fuel companies’ pocket books directly given their wealth. Instead, the divestment movement sees this as a way to raise momentum for action on global warming by stigmatizing the powerful companies most opposed to tackling the issue.
In addition, many of the world’s divesters view it as a prudent financial choice, heeding arguments about the potential of an up-coming “carbon bubble.” This means that once the impacts of global warming force governments to act, the worth of fossil fuel companies will plunge. Currently economists price these companies on the premise that most, if not all, of the world’s fossil fuels will be burnt. However, scientists say most of the world’s remaining fossil fuels will have to remain unexploited, if the world is to avoid catastrophic global warming. Governments have agreed to keep temperatures from rising two degrees Celsius above pre-industrial levels, but to date have moved slowly.
The Rockefeller Brothers Fund divestment decision comes one day before world leaders are to meet at a UN Climate Summit in New York City. The summit, which will host over 120 world leaders, is meant to pave the way for a new global agreement established in Paris in 2015. Meanwhile, over half a million people marched worldwide yesterday, including around 400,000 in New York City, calling for more ambitious action on global warming.
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