Gates Foundation Divests Holdings in BP

The Bill and Melinda Gates Foundation supports plenty of impressive work when it comes to social enterprise, women’s empowerment, fighting infectious diseases and lifting people out of poverty. But the foundation’s investments in fossil fuel companies run the risk of ultimately curtailing such progress, critics say.

For years, Bill Gates himself pushed back against these naysayers, telling The Atlantic last year that divestment campaigns were “false solutions” that did not help the world’s need to find an “energy miracle.”

Recently, however, the Gates Foundation has changed its tune -- not necessarily by words, but by actions. According to a Securities and Exchange Commission (SEC) filing issued late last year, the foundation sold over 6 million shares of BP advanced depository receipts (certificates sold by banks that represent foreign stock sold in the U.S. equities markets) that together totaled over $187 million.

That is less than 0.50 percent of the foundation’s total endowment of $39.6 billion. But for divestment campaigners, this is still a victory in the quest to convince philanthropic foundations, universities, and pension funds to rid themselves of securities in oil and coal companies. For the Gates Foundation, which gave out grants totaling over $4 billion last year, much of decision was most likely financial: The Guardian newspaper suggested that the value of the foundation’s energy holdings has most likely declined by as much as 85 percent since 2014.

The Gates Foundation’s decision follows the lead of cities and private foundations that are divesting from fossil fuels to the tune of over $3 trillion.

Seattle, home to the Gates Foundation’s headquarters, takes the credit for being the first large city in the U.S. to wean its investments away from oil and coal companies, though the process has reportedly not been easy.  San Francisco’s Board of Supervisors also passed a resolution last year urging the city’s pension fund to divest over $580 million from holdings tied to the fossil fuel industry — but by some press accounts, that process has also moved slowly.

Universities in those regions, however, have resisted the calls for divestment. A 40-minute drive south from San Francisco, Stanford University’s Board of Trustees voted against selling off equities in oil and gas companies. And, like many universities, the University of Washington agreed to divest from coal, but some say it's moving too slowly when it comes to doing the same with oil and gas companies.

Meanwhile, private foundations -- ranging from those run by the extended Rockefeller family to the Ben & Jerry’s Foundation -- have increasingly sold off their stakes in fossil fuel companies. Even before the price of oil slumped in 2014, an Oxford University study posited that fossil fuel divestment campaigns were accelerating at a quicker pace than similar agendas directed toward tobacco companies or the 1980s movement against South Africa’s apartheid policy.

Countries in oil-producing regions, of course, have been slower to join this global movement to divest from fossil fuels for obvious reasons. In the North Sea, which emerged as an oil-producing region in the 1980s and 1990s, Norway’s sovereign wealth fund is beginning to divest from its coal-related holdings; universities in Scotland are also selling off assets issued by fossil fuel companies.

But don't plan to hear much talk about divestment in the Middle East any time soon (as those companies are generally state-owned). In a departure from business-as-usual in the region, Abu Dhabi, United Arab Emirates, manages a $250 million clean tech fund. It is a tiny amount indeed, but it's evidence that more of the world is at least listening to what supporters say are the moral, environmental and business cases for fossil fuel divestment.

Image credit: Lester Public Library