Rockefeller Brothers Fund sells coal and oil sands investments

The Rockefeller Brothers Fund announced on Monday that it was selling its investments in the coal industry and in Canada's oil sands, and reviewing its remaining fossil fuel holdings for possible sale in one or two years.

Stephen Heintz, the fund's president, suggested that John D. Rockefeller, the oilman who established the family's fortune, would approve of their decision and would be "leading the charge" into renewable energy if he were alive today.

The Rockefeller move is the latest that dozens of foundations, colleges and charities have taken over the past year in response to a grassroots campaign modelled on the anti-apartheid divestment push that targeted South Africa.

The total amount of money these groups have promised to shift away from fossil fuel companies amounts to a relatively small share of the global investment pool so far.

But the effort to make oil, gas and coal investments as unpopular as tobacco has been a prominent theme in advance of Tuesday's New York climate summit organised by Ban Ki-moon, UN secretary-general.

"Stay away from this fossil fuel-based investment. Do much more on renewable energy." Mr Ban told a meeting of business and government leaders on Monday morning.

Mr Heintz acknowledged that the Rockefeller Brothers Fund's holdings were not very large, but said selling them would send a "signal" about its views on the future of energy.

"The science is crystal clear" on climate change, he said. "We've just got to leave the bulk of the remaining fossil fuels in the ground."

At the same meeting, the World Bank announced more than 1,000 companies and investors had expressed support for putting a price on the carbon dioxide emissions from burning fossil fuels that drive climate change.

They include Royal Dutch Shell, which has had an internal carbon price for several years, as well as Nokia, LG Electronics and Lego.

A total of 73 national and 11 regional governments responsible for 54 per cent of global greenhouse gas emissions are now pricing carbon or plan to do so, the World Bank said, including China, the EU, and several US states.

Separately, some of the world's largest institutional investors managing $24tn in total have backed carbon pricing this week, including BlackRock and Calpers.

Several large energy companies have sent representatives to New York to take part in the summit, according to UN officials, including China's Sinopec, France's Total, Norway's Statoil, and Shell.

Ακολουθήστε το Euro2day.gr στο Google News!Παρακολουθήστε τις εξελίξεις με την υπογραφη εγκυρότητας του Euro2day.grFOLLOW USΑκολουθήστε τη σελίδα του Euro2day.gr στο Linkedin

That points to an awareness in the industry about how the climate landscape is changing, said Tomas Christensen, a senior adviser to Mr Ban.

"I get the sense that they think they could have their Kodak moment and they don't want to be left behind," he told the Financial Times.

"They are definitely interested in understanding more about the future because they can see the price structure is changing; projections for renewable energy growth are going up and volumes of installed renewables are growing as costs come down.

"It seems to me that makes them think about what that means for them."

More than 120 world leaders, including US President Barack Obama, are due to set out more actions to combat climate change at the one-day UN summit on Tuesday.

The meeting is supposed to bolster political momentum ahead of a much larger conference in Paris at the end of next year, where negotiations on a global climate agreement to lower emissions are due to be finalised.

Mr Heintz of the Rockefeller Brothers Fund said that while it could be seen as ironic that the family was pulling its money out of fossil fuels, its members had a sense of responsibility. They also believed they were following the example of John D. Rockefeller, who was quick to see the potential of the US oil industry in the 1860s and founded Standard Oil of Ohio in 1870.

"He was an innovative, forward-looking businessman," Mr Heintz said. "He would recognise that clean energy technology is the business of the future."

There is no robust evidence that divestment campaigns have any impact on share prices, and the effects, if any, are likely to be more significant for small coal companies than for Exxon, which has a market capitalisation of $412bn.

Other investors say they would rather engage with company managements to change their strategies, and many funds are unable to divest under the terms of their mandates.

However, the Rockefeller family has been unsuccessful with attempted engagement in the past. In 2008, the family carried on a campaign to put pressure on ExxonMobil, one of the successors to Standard Oil, to appoint an independent chairman to work with Rex Tillerson, the chief executive. It won considerable support from other shareholders, but failed to pass, winning 39.5 per cent of the vote.

Mark Fulton of the Carbon Tracker Initiative, a think-tank that works on investment and climate change, said he expected divestment to encourage companies that retained their shares to engage with managements.

"It will gather pace - it's like a ball rolling downhill," he said.

© The Financial Times Limited 2014. All rights reserved.
FT and Financial Times are trademarks of the Financial Times Ltd.
Not to be redistributed, copied or modified in any way.
Euro2day.gr is solely responsible for providing this translation and the Financial Times Limited does not accept any liability for the accuracy or quality of the translation

ΣΧΟΛΙΑ ΧΡΗΣΤΩΝ

v
Απόρρητο