Ray C. Anderson Foundation is the Latest Institution To Divest From Fossil Fuels
(3BL Media/Justmeans) Burning fossil fuels has made our modern world possible with its many conveniences, but it has also been the main cause of climate change. As UN Chief Antonio Guterres recently declared, “Continuing to invest in fossil fuels would create “an unsustainable future.” He added that “we must stop making bets on an unsustainable future that will place savings and societies at risk."
While an estimated $825 billion was invested in fossil fuels and high emissions sectors in 2016, according to Guterres, a divestment movement is growing. Over 800 institutions have divested around $5.57 trillion from fossil fuels. The Ray C. Anderson Foundation is the latest institution to announce it has divested from fossil fuel investments. The private family foundation recently announced that it is now fossil fuel free after having divested of investments in oil, coal and gas companies. The Foundation’s total assets are approximately $50 million.
“Fossil fuel divestment is both ethically and fiscally responsible,” said John A. Lanier, executive director of the Ray C. Anderson Foundation and one of Ray’s five grandchildren. “Investment has consequences, and we intend for our assets to grow by fueling renewable energy and other clean technologies that will combat climate change.”
The Foundation believes that divestment is not only ethically responsible, but “also fiscally responsible,” according to a statement. By divesting, the Foundation is not “exposed to the risk of a significant decline in the value of fossil fuel companies.”
While some still argue that low carbon investments don’t pay off, a report released in December 2016 found that they do indeed pay off. Comparing the returns of six versions of the S&P 500 Index, the report found that “low-carbon versions of the S&P 500 actually outperformed the benchmark over the five-year period.”
The fossil fuel divestment movement began on American college campuses over six years ago. It has grown into a global movement, with over half of all institutions and individuals who have divested from outside the U.S. Universities, foundations, and faith-based organizations propelled the movement initially, and they continue to account for 54 percent of new commitments made. However, large private and institutional asset holders are recognizing the value of divesting.
Recently, the managers of the world’s largest sovereign wealth fund, run by the Norwegian central bank, recommended divesting $35 billion in oil stocks. If the Norwegian government approves, it will be the first time a large equity investor has divested from the fossil fuel industry. The fund controls about 1.5 percent of global stocks, so divestment would have a big impact. The Norwegian government is expected to make a decision next year.
In November, New York City Public Advocate Letitia James organized a public hearing on climate action. At the hearing, activists called for New York City’s pension funds to divest from fossil fuel companies. The NYC Pension Funds have over $3 billion in oil, gas and pipeline companies.