Climate Action

Rockefeller fund reveals case study of success after divestment from fossil fuels

Five years on from divesting from fossil fuels, the Rockefeller fund has released a new case detailing its success.

  • 12 May 2020
  • Rachel Cooper

Five years on from divesting from fossil fuels, the Rockefeller fund has released a new case detailing its success.

This week, the Rockefeller Brothers Fund (RBF) released a new case study detailing how its investment returns beat market benchmarks since divesting from fossil fuels five years ago.

Financial data included in the study shows the RBF posted an average annual net return of 7.76 percent over the five-year period that ended December 31, 2019. Over the same period, an index portfolio made up of 70 percent stocks and 30 percent bonds—including coal, oil, and gas holdings—returned 6.71 percent annually.

In 2014, the RBF announced its divestment from fossil fuels. The Fund, which pours about $15 million each year into climate change solutions, set out also to make a financial case, that fossil fuel holdings would decrease in value as the world shifted away from carbon-intensive energy to mitigate the impacts of global warming.

Valerie Rockefeller, great-great-granddaughter of John D. Rockefeller and Chair of the RBF Board of Trustees, said: “When we joined the divestment movement, we were convinced that a more profitable and less risky investment portfolio could be constructed without exposure to fossil fuels. Now we have five years of financial data to back it up.”

The divestment movement accounted for just $50 billion in global assets under management when the Rockefeller Brothers Fund signed on in 2014. That number has now ballooned to around $12 trillion today.

The RBF study also notes the impact the coronavirus pandemic has had on reducing emissions - due to grounded flights, limited commuting, and suppressed economic activity, which it says has seen crude futures plummeting below zero.

Stephen Heintz, president and CEO of the Rockefeller Brothers Fund, said: “We spent the last five years proving oil was bad not only for the environment but for the bottom line,” said Heintz. “COVID 19 did it in two months.”

The Rockefeller Brothers Fund investment portfolio is now 99 percent fossil fuel free. Coal and tar sands account for less than 0.1 percent of its $1.1 billion portfolio; oil and gas comprise another 0.9 percent and falling. 

“Oil is obviously a definitional part of my family’s past,” said Rockefeller. “But it has no place in our future.”

Read the full report here.