Beyond Divestment: Decarbonizing Our Investment Portfolio - New Report from The Rockefeller Brothers Fund
INTRODUCTION
The environment has been one of the most enduring commitments of the Rockefeller Brothers Fund (RBF). For more than 80 years, our grantmaking has supported conservation, ecosystem management and, since 2003, climate change mitigation and resilience. In 2023, climate-related grants—including the full Sustainable Development, Democratic Practice–Global Challenges, and China grantmaking programs, as well as portions of our Central America and Western Balkans grantmaking—will constitute just under 50 percent of the Fund’s total grantmaking budget.
In November 2022, the RBF board of trustees adopted a plan to spend an additional $100 million to address the climate crisis over the next ten years. This includes funding for related work to build democratic institutions and practices that can enable meaningful climate policy and to transform violent conflict that is both driven by and exacerbates weather-related migration and competition for natural resources. The 2023-24 budget approved under this plan provides a 23 percent increase over our typical grantmaking budget.
As it became clear that our investments at times contradicted our climate-related grantmaking efforts, in September 2014, the RBF announced our intention to divest from fossil fuels. Today, the RBF endowment is more than 99 percent fossil fuel-free. But as the climate crisis grows more urgent with every superstorm and megadrought, we have determined that eliminating our exposure to fossil fuel holdings alone is not enough.
Now, the RBF is working to align our endowment portfolio with science-based emission targets1 to keep global temperature rise under 1.5 degrees Celsius above preindustrial levels, which scientists tell us is the only way to avoid the most severe impacts of climate change.
CARBON FOOTPRINT ANALYSIS
In 2022, we began a process to better understand and work to minimize all the ways that we and the companies we invest in contribute to greenhouse gas emissions that warm the planet.
We assembled a working group of experts from our finance staff and Investment Committee, as well as grantmakers from our Sustainable Development and Democratic Practice—Global Challenges programs, to work with our Outsourced Chief Investment Office, Agility. They started by commissioning an analysis of the Scope 1, 2, and 3 emissions our Public Market and Private Capital investments produce to identify the starting point from which we could map the work ahead.2
Scope 1 emissions are produced directly by a company’s operations. Scope 2 emissions are generated by the production of energy, like electricity, a company purchases for its operations; although the emissions are created outside the company’s control, the company does exercise control over how much energy they use and where they purchase it. Scope 3 emissions, also known as value chain emissions, are further outside a company’s control, including those emitted during the production of raw materials used for their products (upstream) and the consumption of their products (downstream).
Take for example a baker who produces gourmet chocolate chip cookies. The baker’s Scope 1 emissions might come from the gas stove used to bake the cookies; her Scope 2 emissions might come from electricity purchased to power the lights, mixers, and timers in the bakery; and her Scope 3 emissions might have been produced by the manufacturer of her oven, the tractor that harvests the wheat for her flour, and the plane used to import her gourmet chocolate (upstream), as well as her disposal of shells from eggs in the recipe, shipping the cookies to her customers, and consumers’ disposal of the packaging (downstream)...