By Rachel Koning Beals
The Rockefeller Foundation, a 107-year-old philanthropy built by oil tycoon John D. Rockefeller, says it will completely break with the fossil-fuel industry that seeded its wealth.
The pledge makes the Rockefeller Foundation the largest U.S. foundation to join this divestment movement in the interest of slowing man-made climate change’s negative effects on coastlines and in contributing to weather extremes. Among other divestors, New York State’s influential $226 billion pension fund, one of the world’s largest, has said it will eliminate many of its fossil-fuel stocks in the next five years.
“Burning fossil fuels is not necessary to sustain our economy and economic growth over the long run — and it’s detrimental to our climate future,” Rajiv Shah, the president of the Rockefeller Foundation, told CNN Business.
“It helps to collectively put our thumb on the scale towards a more sustainable future. That’s our hope. That’s our aspiration,” said Shah, who previously led the United States Agency for International Development (USAID) during the Obama administration.
The foundation’s move is a symbolic shift. The endowment was largely built from the proceeds of Standard Oil, a company that at its peak controlled more than 90% of petroleum products in the U.S. For instance, ExxonMobil ( XOM ) traces its roots to Standard Oil, which was broken up in a historic anti-trust wave. Early interests from the fund focused on health and hygiene, and not without controversy, as it granted money to an organization linked to Nazi eugenics studies. More recent activities have focused on food resiliency and solar power in Africa.
This week’s move is not the first rumblings on climate change from the powerful family. Three Rockefeller family members expressed in an October op-ed their belief that major banks should back away from fossil-fuel finance.
“Financial leaders of today [must] embrace innovation and move beyond the profits of fossil fuels to develop banking models that will excel in a zero-carbon world,” wrote Daniel Growald, Peter Gill Case and Valerie Rockefeller in their New York Times piece.
Their response followed climate-pledge news from JPMorgan Chase /zigman2/quotes/205971034/composite JPM +0.74% , their family’s legacy bank and the business that emerged from its oil dominance. JPMorgan Chase made an announcement that appeared to align its activities with the Paris Climate Agreement although, critics said, without actually committing to curtail its lending activities to the fossil-fuel sector.