Seventeen foundations, whose combined assets total $1.76 billion, committed to divest their fossil-fuel holdings, according a statement from their joint initiative called Divest-Invest Philanthropy.
The divestment initiative, which began this month, includes the $335 million Park Foundation Inc., Ithaca, N.Y., the biggest of the group, followed by the $304 million Schmidt Family Foundation, Palo Alto, Calif., founded by Eric E. Schmidt, executive chairman of Google Inc.
Among others are the $300 million Joseph Rowntree Charitable Trust, York, England; $176 million Educational Foundation of America, Fairfield, Conn.; $165 million Wallace Global Fund, Washington; $129 million Russell Family Foundation, Gig Harbor, Wash.; and $102 million Sierra Club Foundation, San Francisco.
Some of the 17 foundations “are fully divested from fossil fuels, while others are targeting specific classes of investments along a trajectory toward complete divestment,” the statement said.
The John Merck Fund, Boston — a signatory of the initiative — has divested 97% of its fossil-fuel holdings, amounting to 8% to 10% of its $79 million fund, said Olivia Farr, chairwoman of the Merck fund board of directors.
“We have 3% left, tied up in a private equity position, which takes some time to unwind,” Ms. Farr said.
“We are doing very well” in investment performance after the divestment, Ms. Farr said. In addition, “everyone can go to bed with a clean conscience.”
The fund has redeployed the proceeds investing in green technology, energy efficiency and green consumer goods, Ms. Farr said.
“It makes no sense, if we (as a Merck fund mission) are trying to mitigate climate change (to) hold them (fossil-fuel companies) in our portfolio,” Ms. Farr said.
The combined amount of fossil-fuel holdings the 17 foundations have divested or expect to divest wasn't available, nor were any fossil-fuel companies or sectors identified.
“For ethical and financial reasons, we therefore commit to divest from the major fossil-fuel companies — retaining minor positions for shareholder advocacy — and to invest instead in climate solutions and a sustainable future,” according to the statement, written as an open letter to the philanthropic community and signed by leaders of the 17 foundations, calling on other organizations to divest fossil fuels as well.
“While moral accountability alone compels us to act, the financial case to divest and reinvest is no less compelling,” the statement said. “There is growing recognition that if we hope to maintain a livable climate, the majority of fossil-fuel reserves now on the world's books will become stranded, unusable assets. … Fossil-fuel stocks, whose valuations are linked to reserves, are thus vastly overvalued, with conservative estimates pointing to a multitrillion-dollar 'carbon bubble.'”
The other signatories of the divestment commitment are the $64 million Compton Foundation, $50 million Jesse Smith Noyes Foundation, $25 million Solidago Foundation, $10 million K.L. Felicitas Foundation, $7 million Chorus Foundation, $6 million Center for Rural Affairs Granary Foundation, $5 million Ben & Jerry's Foundation, $5 million Nia Community Fund and $4 million Singing Field Foundation Inc.
Representatives of other foundations that were contacted couldn't be reached for comment.
Foundation asset values are from Divest-Invest, except for the Merck fund, which provided its value.
