Where Is the Rockefeller Family Reinvesting Its Former Oil Holdings?

Monday, April 13, 2015

The Rockefeller Brothers Fund—the $866 million-asset foundation started in 1940 by John D. Rockefeller Jr.’s five sons—announced in September that the family would divest itself of all their coal, tar-sands, and fossil-fuel investments held in the fund’s endowment. The eight Rockefeller family trustees on the board decided the fund needed “to better align its endowed assets with its mission” of combating climate change.

The irony of Standard Oil’s heirs shedding fossil fuels wasn’t lost on the media. “Rockefeller Brothers Fund forsakes its legacy,” screeched the tabloid headline of normally polite NPR. The fund holds less than 5% of its portfolio in fossil fuels, down from 7% when it began divesting in 2014, and it has reduced its coal and tar-sands assets to just 0.8% of the overall endowment. RBF hopes its endowment will be fossil-fuel free in the next three years.

Seven months after the announcement, Pentacircled back with a pointed question: Where are the Rockefeller heirs reinvesting their former “dirty” money? The answer: clean technologies like solar and wind energy. Some readers might roll their eyes, but we’re giving them a pass. The Rockefeller family foundation is shrewdly leveraging its asset base, not just its grants, to have more impact in the family’s chosen field of battling climate change. “If we’re only using the 5% we’re required to pay out each year in grants,” reasons Stephen Heintz, president of RBF, “we’re underutilizing our assets.”

Clean-energy investments will eventually make up as much as 10% of the fund’s overall endowment. But earning healthy returns from a portfolio is rather important, too. Will their squeaky-clean investments fare better than fossil fuels? It’s too soon to tell, concedes 35 year-old Justin Rockefeller, RBF trustee and son of John D. the fourth. “But it’s obviously helped us that the price of oil dropped,” he says, before dryly adding that there are “some conspiracy theories out there.”

Justin argues that his family’s controversial move away from its historic ties to the fossil-fuel industry is a plus for the foundation’s environmental mission—just “another tool in our tool belt to help have an impact on the world.”

Source: Barron's Impact Investment Blog (link opens in a new window)

Categories
Energy, Entrepreneurship, Environment
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energy, impact investing, renewable energy, solar, sustainability