- Ellen Dorsey, a veteran of the anti-apartheid movement, has used her activist experience and her leadership position at the Wallace Global Fund to push for divestment from the fossil fuel industry.
- The Wallace Global Fund has supported the fossil fuel divestment movement from its inception. By 2021, the movement had propelled divestment of over $14 trillion in assets from universities, pensions cities, faith groups and more.
- Dorsey launched Divest Invest Philanthropy, a coalition of over 200 foundations to divest their endowments from fossil fuels and invest in climate solutions. She says foundations can still do more to invest their endowments in climate solutions, and shouldn’t be “hoarding acorns” in this “moment of urgent need.”
- In an interview with Mongabay founder Rhett A. Butler, Dorsey talks about how the divestment movement makes financial sense, the futility of engaging with the fossil fuel industry to drive change from within, and how “everyone has to be an environmental activist if we’re going to save the planet.”
A decade ago, the idea of using the financial resources of university endowments, religious institutions and philanthropic foundations as a mechanism to advance action on climate change was still in its relative infancy, mostly limited to college campuses. While divestment has been long used as a tool for activism, in the early 2010s, plenty of institutions that were ostensibly working on or supporting efforts to combat climate change were still heavily invested in the fossil fuel companies that were most responsible for driving carbon emissions.
As a student of the anti-apartheid movement, Ellen Dorsey understood the power of using an institution’s financial muscle to achieve real-world outcomes. And as the head of the Wallace Global Fund, a private foundation established by entrepreneur and former U.S. vice president Henry Wallace, she was in the position to help support the movement, including accelerating adoption within the philanthropic sector. So the Wallace Global Fund became one of the major backers of the fossil fuels divestment movement, putting money into coal divestment campaigns on college campuses, youth groups and other advocacy efforts. Dorsey and the Wallace Global Fund also organized the “Divest-Invest Philanthropy” initiative to bring other foundations on board, both in terms of existing investments in polluting industries and investing in cleaner ones.
“Organizing within philanthropy was important because, of course, it is very difficult for movement organizations, who are the recipients of funding, to call on their funders to divest. It was very clear we needed to do a peer-to-peer campaign to encourage our peers in philanthropy to be responsive to the demands of the movement and to do the right thing with their investments,” Dorsey told Mongabay. “Additionally, with our endowments we could be a model of how to divest from fossil fuels and invest in climate solutions, drive the market for fossil-free products, and hold up our portfolios to demonstrate equal or better returns.”
The Divest-Invest Philanthropy officially launched in 2014 and grew quickly: By late 2016, more than 150 foundations had committed to the movement; a number which eventually climbed past 200. The broader divestment movement also blossomed: by 2020, some 1,200 institutions with $14 trillion in assets had started or committed to divest from fossil fuels.
Dorsey cites three reasons for the rapid growth in divestment: strong ethical and financial arguments, including the poor economic performance of the fossil fuels sector over the past several years; fiduciary responsibility, which opens financial managers to liability if they don’t protect the assets under their charges; and the inclusivity of the approach.
“Now, many years into the movement, there is clear data that divested portfolios will deliver equal or far superior returns,” she said. “Why would you sacrifice your social legitimacy for underperforming returns? It makes no sense. So that’s why I think this movement is now completely unstoppable. The data is there, the returns are poor, and the renewables are taking over.”
Dorsey is also outspoken on the tendency of foundations to prioritize growing their endowments instead of putting as much money into addressing existential threats that have limited time frames for action. The Wallace Global Fund has bucked this norm in recent years by paying out significantly more than the standard 5% of its endowment when the foundation has outperformed.
“I’m shocked, and I am disillusioned by the failure of our sector to have a much deeper discussion about raising the payout levels for philanthropy,” she said. “I think it should be done voluntarily. But if it’s not done voluntarily and these compounding crises continue, I guarantee we’re coming back to this discussion because it is going to be driven and regulated at the federal level. Philanthropy — such an unaccountable sector — is going to have to face regulations and calls for systemic change when we hoard our acorns for what, some other future colder winter? What would a colder winter look like than right now?
“Open the coffers and start putting more money to play. Foundations can still exist in perpetuity without growing their endowments.”
Dorsey discussed these issues and more during a March 2021 conversation with Mongabay founder Rhett A. Butler. The following Q&A has been lightly edited for clarity and style.
AN INTERVIEW WITH ELLEN DORSEY
Mongabay: What inspired your interest in human rights and environmental sustainability?
Ellen Dorsey: I started out doing traditional human rights work, primarily civil and political rights work. But over the course of my journey, I realized that human rights were much broader than civil and political rights. Economic, social, and cultural rights violations were intertwined with the civil rights and the environment and underpinned many of the biggest human rights crises in the world — including extraction of natural resources and the displacement of people from their traditional lands. So, from the earliest days in my career, I saw that environmental and human rights issues were inextricably linked.
Women’s rights, human rights overall, corporate accountability, and environmental issues are all intertwined. We know that effective solutions are not possible unless they address this intersection. I work at the nexus of climate change and human rights today. Climate change is a human rights tsunami — from food system collapse, drought and the privatization of water, disease, dislocation, access to energy, disproportionate impacts deepening injustice and inequality.
Mongabay: 2020 may go down as one of the worst years in recent history for human rights and the safety of environmental defenders, in part due to fallout from the pandemic. How do you view 2020 in the context of broader trends over the past five to 10 years? And what do you see as the biggest opportunities for making progress on this front?
Ellen Dorsey: There are so many layers to that onion. I think that we are all witness to the deep failings of the neoliberal economic model. We are seeing how it is negatively transforming our ecosystems and weakening governments through corporate capture. Governments have become instruments of economic interests, leaving them incapable of promoting and supporting democracy representative of all citizens.
We are at a profound and historic juncture of compounding crises that the world can’t just tinker with and think that everything is going to be “built back better.” We have to address the systemic drivers of the problems, as well as the systemic solutions.
As apocalyptic as that sounds, I also think 2020 revealed the level of growth and creativity of social movements working truly intersectionally to address climate, gender, racial, and economic injustices together. They are calling for systemic change and doing that during a period when all the traditional tools of activism have been stripped away: the street protests, the convenings, the planning and scheming together.
To me, that’s a bright light in a very dark moment. Change never happens without people power, and people power is growing. If you’re situated in the U.S., you can see these intersectional movements. Around the world, the level of growth in social movement organizing has been incredible to witness. But we’re still in a David-versus-Goliath moment: very powerful corporations, very powerful petrostates, very powerful fascist governments, and rampant disinformation stand in the way of true progress. It’s a very dangerous time, but people are also rising, strategically, in solidarity, and intersectionally.
Mongabay: One mechanism for driving change is choosing how you put money to work. You were an early leader and champion of the campaign to divest philanthropy from fossil fuels and to shift investment toward more sustainable options. Since then, this push has become a full-blown movement that extends well beyond the philanthropic sector. What do you make of the progress in Divest-Invest Philanthropy over the past several years?
Ellen Dorsey: We were an early supporter of the call for fossil fuel divestment and helped support the build-out of the movement, both in the U.S. and globally. We then began to organize “Divest-Invest Philanthropy” to engage our own sector to respond to the demands of the movement. Organizing within philanthropy was important because, of course, it is very difficult for movement organizations, who are the recipients of funding, to call on their funders to divest. It was very clear we needed to do a peer-to-peer campaign to encourage our peers in philanthropy to be responsive to the demands of the movement and to do the right thing with their investments. Additionally, with our endowments we could be a model of how to divest from fossil fuels and invest in climate solutions, drive the market for fossil free products, and hold up our portfolios to demonstrate equal or better returns.
The Wallace Global Fund began our own divestment journey after the collapse of 2008, when we first started talking to our board about divesting from fossil fuels and overhauling our investments. At that same time, we also started talking internally about where the climate advocacy community was and was not. From our perspective, there wasn’t a climate movement. There were pockets of climate advocacy, and that advocacy was very much focused on policy and policy change at the global, national, state and local levels. But we were not focused on the industry directly nor were we building movement power. The power of the fossil fuel industry was so great that it could spread disinformation about the science and lobby for inaction to stymie progress. In the wake of the failure of the Copenhagen climate conference and U.S. policy efforts like Waxman-Markey, it was clear that the target needed to be the industry.
I came out of the anti-apartheid movement, writing my doctoral thesis on the strategy of the global anti-apartheid movement. Therefore, I knew that divestment was an effective tactic for mobilizing people, who could follow the money and go to their faith group, their university, or their retirement firm and say, “Hey, those are bad global actors who are wrecking the planet, and I don’t want to profit from them. I don’t want my money in them or my institution’s money in them.”
We began by supporting the first coal divestment campaigns on college campuses. Then, the brilliant Mark Campanale, of Carbon Tracker, published the “stranded asset” analysis, which made a powerful financial case that bolstered the ethical case for divestment. Bill McKibben and Naomi Klein then connected the percolating divestment campaigns with the Carbon Tracker analysis. Bill published the “Do the Math” article in Rolling Stone, and 350.org launched a global divestment campaign. At that point, there were about 40 college campus divestment campaigns. When he published “Do the Math,” the number rose to 400 overnight, and spread rapidly around the world.
We helped fund youth groups and engaged groups working with the faith community to start taking divestment to the religious investors. Then it just grew and grew. I don’t think anyone ever thought this would grow to the level that it did, but I think there are three reasons why it ultimately did.
The first was that it married ethical and financial arguments. The ethical argument is obvious and irrefutable. The financial? When you show investors the data, they can see their investments are declining already, and the returns are only going to worsen. Now, the fossil energy industry has been the worst-performing sector for several years. You’re going to get bad returns. That powerful merging of ethical and financial imperatives was one reason why this took off and grew at the level it did.
The second was fiduciary responsibility, because once you know that you have these risks in your portfolio, you have a fiduciary duty to protect your assets or those of your beneficiaries. You may also be liable for failing to do so. Therefore, ethical, financial and fiduciary arguments all began to align.
The primary theory of change behind the movement was to strip the social license of the industry to operate. The campaigning exposed the weaknesses of the fossil fuel industry’s business model. It exposed its political expenditures and political influence, and made it more difficult to defend subsidies to a dying industry. And increasingly, activists have taken on all sources of finance, from governments, development banks, private banks, and insurers, cutting critical sources of capital. Increasingly, the movement has become a real threat to the industry itself, with the companies publicly citing that divestment was a material threat to their business model.
Finally, divest-invest is an activist campaign that any individual can join. They don’t have to be working in an NGO. They don’t have to be trained; you just follow the money and demand divestment. Once the movement grew, it enabled sophisticated climate and finance groups to get in behind the movement and bring their skill set to strengthen it. That coming together of the movement and the advocacy community is the third reason why I think it’s been very successful.
Mongabay: It’s interesting now that even governments are divesting, like the Norwegian sovereign wealth fund, from companies that destroy forests. The movement is evolving and expanding.
Ellen Dorsey: From the early days, I think there was never a sense that this was the only strategy. This was one of many strategies that needed to be pursued. But in terms of finance, it was clear that first, you can go after these private investors at mission-aligned places like universities, hospitals, faith groups and philanthropies, who would be very vulnerable to these campaigns.
In addition to mission-aligned investors, it was clear that we also needed to stop capital expenditures in fossil fuels. We needed to stop new fossil fuel projects that threatened human rights and the environment and go after the banks and the insurers too. We had to keep on going upstream, eventually to the sovereign wealth funds. The sovereign wealth funds in Norway were so interesting because they were so dependent on oil revenues. They were, in fact, doubly vulnerable being invested in oil. They got it: “Diversification means divestment because we’re doubly exposed to these material risks in the fossil fuel industry.” It’s fascinating and interesting.
Mongabay: How do you respond to the argument that some make where you want to own shares in ExxonMobil to exercise power as a shareholder? Is that at odds with this strategy?
Ellen Dorsey: From the beginning we said, “If you want to hold the minimum number of shares so that you can try to engage the industry, go ahead.” But in reality, the call for divestment was in response to the failure of engagement, because many investors and investor advocacy groups had been engaging with the industry for decades, and it hadn’t worked. That’s an empirical record that will be the subject of many future books.
I think that at this moment in time, if I still believed in engagement despite the evidence that it doesn’t work, I would say there’s only one last demand: the companies must provide a 1.5° Celsius business plan with clear benchmarks and timelines, committing to no new fossil fuel exploration or production. If they’re not willing to do that, then you divest.
We made the first Divest-Invest grants in 2010 to analyze the impact of divestment on the coal sector and testing advocacy work. Then we supported some student convenings in 2011, and then some campus campaigns. But at that point, it was pretty clear to me that philanthropy had a unique role to play. Philanthropy not only needed to be part of the divestment movement as investors, but philanthropy could put the wind at the back of the students by actually transforming their portfolios and showing that it could be done.
The students’ fights at their universities started driving the market for alternatives to fossil fuel investment products, which were needed by investors who divested to reinvest their funds in. This enabled the activists to say, “This foundation started divesting. They’re willing to be transparent about how they did it and what their returns are.”
I began organizing Divest-Invest Philanthropy in early 2013, and in 2014, we announced the first 17 foundations who divested as proof of concept for this movement. The first 17, and then the next 55, which included Rockefeller Brothers Fund, really understood how they could aid the movement. At that stage, the financial arguments weren’t as strong as they are now.
Now, many years into the movement, there is clear data that divested portfolios will deliver equal or far superior returns. The Wallace Global Fund’s investments are proof positive with far superior returns to our benchmarks and similar portfolios that did not divest. We got out before coal, oil and gas tanked. The traditional energy sector has been the worst-performing sector for the last six or seven years. They are at the level of treasuries.
Now the case is so clear. Why would you sacrifice your social legitimacy for underperforming returns? It makes no sense. So that’s why I think this movement is now completely unstoppable. The data is there, the returns are poor, and the renewables are taking over. Money and wealth have to be made on renewables.
Of course, there is much to still interrogate about finance and the energy transition. Should we only be concerned about high returns or should we be trying to make sure the energy transition is just and fair and includes everyone, even if the returns are a fraction lower? But that is a whole other ethical debate about foundations, charitable investors and market returns.
Mongabay: The scale and complexity of the environmental challenges we face are daunting. What do you see as the key levers for driving the systemic change needed to shift economies and societies as a whole toward sustainability?
Ellen Dorsey: Finance has been an important lever, and I want to cite the investment side of the equation. We need about $1 trillion of investments in renewables and clean tech annually to scale the solutions in time. Investing in the solutions is not just part of the solution. The stronger the renewable sector is, the further it weakens the fossil fuels sector. There’s kind of a robust theory of change around divest and invest.
But perhaps even more important than investing the $1 trillion in large-scale renewables or clean-tech projects, I think mission-driven investors particularly need to be thinking about what that energy transition looks like and what other market-based solutions we need to strengthen for adaptation, transformation and justice. We should be using our investment capital to help see that those solutions include small-scale, community-driven renewable energy for the close to billion-plus people that don’t have access to electricity today.
How can we have an energy transition when we can leapfrog fossil fuels and leave those people behind? How do we invest in Indigenous communities that have been on the front line of extractive fights so that they can own and build economic opportunities and renewable energy? How can we support agroecological solutions and cooperative models? There are so many opportunities, and our investment capital can play a really important role in that, and we can get fair returns. Mission-driven investors need to be the ones thinking about just climate solutions in ways that governments, who would have to prioritize bringing the emissions down, are going to be thinking about very differently.
Finance is important, and it has played an important role on both the divest and invest side. But that was also because governments weren’t doing their job. They are beholden to the fossil fuel industry or other economic interests, but we need governments to provide big, ambitious plans that link the energy transition to economic growth, like the Green New Deal. Government has to be part of the solution. Governments and the economy both serve society, so ultimately it is up to people to make both those institutions do what they’re supposed to do.
It always comes back to people and movements, for me. We have to organize. We can’t wait. We can’t let the corporations get away with what they do. We need to support the ones that lead, and we need to demand more from our governments.
Climate is our generation’s issue. We must all be climate activists. Every human being has to be an environmental activist now if we’re going to save the planet for our children and our grandchildren. We’re the collective generation accountable to the future. We must all find our place and contribute to the fight.
Mongabay: You’ve talked about the just transition. A lot of these issues in these sectors also apply to conservation: There’s a legacy of colonialism, there is lack of consent, there are human rights, and there is discrimination against historically marginalized groups. What do you see as current gaps in the conservation sector? Or where can conservation do better?
Ellen Dorsey: Can I just say two things? It won’t capture nearly enough. That’s a huge topic, and there are so many dimensions to it.
The conservation community, historically as you just said, has not been centered on justice and the rights of communities within it. To say not nearly enough is almost a trivialization. Change must begin with centering the affected communities in the design of any programs or solutions. We must uphold free, prior and informed consent of communities when we look at conservation projects, development of renewables, and forest sequestration.
The world has enough experience with colonialism and the extraction of natural resources from Indigenous lands to focus on the human rights issues associated with proposed climate solutions and conservation schemes. We must also be asking what is the world going to look like in 20 years, and our conservation strategy should be preparing for that now. The privatization of water is one such example. It is going to be one of the most devastating issues in the world in 20 years. Do we have the conservation strategies to address the right to water now? Access to affordable and clean energy is another human right that needs to be addressed now. The right to power, the right to electricity, and the right to water are tied to conservation issues, the use of the land, and access to natural resources.
Coming full circle, this is why we must integrate climate and human rights. Many conservation groups are looking through those lenses. But are we resourcing that work through philanthropy sufficiently enough? Probably not, particularly not the required partnership with front-line, climate justice, and other affected groups.
Mongabay: I want to turn to the philanthropy side of things. The fund attracted a lot of attention in philanthropic circles in recent years when it has gone well beyond spending the standard 5% of its endowment to grant-making. Could you speak to the motivation behind the decision?
Ellen Dorsey: We are a family foundation whose donor was a very prominent leader. He was vice president of the United States. He was one of the architects of the New Deal. He was a renowned farmer and built a very successful company, Pioneer Hi Bred, which was the source of the funds for the foundation. His grandchildren and great-grandchildren are still involved in the foundation. Upholding his legacy is very important to us.
We also recognize that we are at such a profoundly historic moment. Growing or maintaining our endowment when that money could be used to support successful advocacy and campaigning to address the problems at the nexus of human rights, environment, democracy, and corporate accountability does not align with our mission. We said, “We have to interrogate not just how we invest our endowment, but how much of it are we spending. The minimum payout required is no longer fit for purpose for the world we live in today.” And that was before COVID, before the economic collapse of 2020.
The threats to our democracy and the climate emergency drove us to start to spend more. If we have only a decade to address the climate emergency and we know that wealth will be created in the future, is it ethical for a foundation to only spend 5%, particularly when it has made 15% returns in the market? Or should we be helping to build the most powerful movements and research innovations to help us solve that climate emergency?
Now we have the intersecting crises of climate and COVID. I think it is a profound, ethical question for any foundation today. Can we pay more? Whether a foundation wants to exist in perpetuity or not, they still could pay more. Returns over the last five years for a standard investment portfolio minus inflation would still yield 10%. Why wouldn’t you double your grant-making for the next three years? You would still be at the level you were at five years ago. Instead, you would grow your endowment in a moment of urgent need?
I’m shocked, and I am disillusioned by the failure of our sector to have a much deeper discussion about raising the payout levels for philanthropy. I think it should be done voluntarily. But if it’s not done voluntarily and these compounding crises continue, I guarantee we’re coming back to this discussion because it is going to be driven and regulated at the federal level. Philanthropy — such an unaccountable sector — is going to have to face regulations and calls for systemic change when we hoard our acorns for what, some other future colder winter? What would a colder winter look like than right now? Open the coffers and start putting more money to play. Foundations can still exist in perpetuity without growing their endowments.
I’m not concerned that we won’t get invited to some cocktail parties.
Mongabay: What do you view as the foundation’s most impactful grant or program during your tenure?
Ellen Dorsey: I cannot choose my favorite child. That’s always a bad thing to do. What I’m most proud of is that we recognize the intersectionality of our programs. We have no silos. Our staff works seamlessly together in really wonderful ways. It’s partly because we’re smaller, but also because we’re committed to it. I think what I’m most proud of is that we have built our programs supporting movements and organizations that build people power. We also tackle corporate accountability. A lot of foundations don’t do that, given the source of the endowment. We have also used our investments as a tool to help advance our priorities in really innovative ways.
I am proud of our work on the Divest-Invest movement. But sometimes it’s the really small things that maybe don’t get on the radar: getting resources into the hands of some community groups that are working collaboratively against the most unbelievable odds in Zimbabwe, or fighting at the community level to end female genital mutilation. Those are the ones that perhaps don’t get the same support from other foundations, yet we know with a little bit of resources, connected through a movement structure, it could be transformative. So, I have a lot of favorite children.
Mongabay: What would you say to young people who are distressed about the current trajectory of the planet?
Ellen Dorsey: I have an almost 23-year-old daughter who I’m very proud of. She got arrested with me and Jane Fonda in the Fire Drill Friday protests alongside Reverend Barber and leaders of other movements. She said, “Mom, I want to join you in this.” I said, “Are you sure you’re ready for civil disobedience?” She said, “I have to.” And I said, “I have to,” because “the only antidote to despair is activism.”
Activism takes different forms for different people. It’s not all civil disobedience. Getting arrested might not work for you, but there are ways we can all contribute to social and environmental change, and it is the only sane thing to do if you have a conscience. Activism is what gives you hope. Because again, governments, corporations, and the financial system are only going to change if we make them change. That’s people standing up and claiming their power. From the climate emergency to the explosion of white supremacists in this country, there’s a lot to be afraid of right now, but activism is the only answer. Put your shoes on.