Friday, January 16, 2015
Rockefeller Brothers Fund Profiled in Rolling Stone
For RBF, the logic of divestment was twofold. "There was a very clear moral impetus to do this," Wayne says. RBF makes significant grants in the field of sustainable development, and the fund reached a breaking point with Big Carbon over what Wayne describes as "the schizophrenic notion that we had investments that were undermining our grants."
But there was also "an economic reason for divestment," Wayne says. RBF's business is philanthropy. It was determined not to damage its portfolio. But as RBF scrutinized its fossil-fuel investments, it began to have concerns. One of the primary assets on an oil company's books are its "proven reserves" – that is, the oil in the ground and beneath the oceans that will be the source of future profits. RBF questioned the wisdom of parking its money in companies that, in a low-carbon world, would not be able to bring that oil to market – "proven reserves" risked becoming "stranded assets." RBF also balked at investing in companies that continue spending astronomical funds in the hunt for even more unburnable oil. Exxon Mobil, America's largest oil company, despite having more than 25 billion barrels of proven reserves, sunk more than $7 billion into new exploration in 2013 alone. "There is no good reason for this vast expenditure of stockholder wealth," wrote Longstreth. (He has also served as chairman of the finance committee of the Rockefeller Family Fund.) "It is wasted capital," he continued, "an offense against stockholders in terms financial alone...."