Naomi Klein: Why aren’t environmental groups divesting from fossil fuels?

“If it’s wrong to wreck the climate, it’s wrong to profit from that wreckage.” That’s the slogan of the Fossil Free Movement, a campaign started by Bill McKibben and 350.org to persuade “educational and religious institutions, city and state governments, and other institutions that serve the public good” to divest from fossil fuels.

Naomi Klein is also involved in the campaign. In an article this week in The Nation, she points out that there’s one more target missing from the list. Believe it or not, that missing target is environmental organisations. No wonder the campaign missed them off the list. It’s a no brainer. Isn’t it?

Well, no. Some of the biggest environmental organisations in the world invest in fossil fuel companies. By a remarkable coincidence, the same environmental organisations are amongst the biggest promoters of REDD as a carbon trading mechanism. The Nature Conservancy. Conservation International. WWF. Wildlife Conservation Society. Meanwhile think tanks such as the World Resources Institute, the Woods Hole Research Center and the Union of Concerned Scientists also invest in fossil fuel companies.

In her article, Klein points out that not all environmental organisations are involved in this scandal. By another remarkable coincidence, these organisations do not promote REDD as a carbon trading mechanism. Greenpeace, 350.org, Friends of the Earth, Rainforest Action Network, Oil Change International and the Climate Reality Project, do not invest in the stock market and either don’t accept corporate funding or place such onerous restrictions on funding that extractive industries are ruled out.

It’s interesting to see how the environmental organisations that profit from their investments in fossil fuel corporations reacted when Klein asked them about their investments and policies. The Nature Conservancy and Wildlife Conservation Society “completely refused to answer any of my questions or provide any further details about its holdings or policies”, Klein writes.

As Klein points out, it’s no wonder that The Nature Conservancy doesn’t have any qualms about profiting from the fossil fuel sector:

[I]n 2010, The Washington Post reported that TNC “has accepted nearly $10 million in cash and land contributions from BP and affiliated corporations”; it counts BP, Chevron, ExxonMobil and Shell among the members of its Business Council; Jim Rogers, CEO of Duke Energy, one of the largest US coal-burning utilities, sits on its board of directors; and it runs various conservation projects claiming to “offset” the carbon emissions of oil, gas and coal companies.

The message from the divest campaign to Big Green is clear: “cut your ties with the fossils, or become one yourself”.

In addition to the article in The Nation, Klein has also produced a list of the environmental groups that are investing in fossil fuels.

The following are the environmental organisations and think tanks that invest in fossil fuels and promote REDD as a carbon trading mechanism, extracted from Klein’s list.

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UPDATE – 8 May 2013: Jennifer Andreassen, Senior Communications Manager for the International Climate Programme at Environmental Defense Fund, contacted REDD-Monitor stating that “EDF does not invest money in the fossil fuel industry.” However, EDF does not make public its holdings in the stock market. Klein comments, “for this reason, we are unable to independently verify that any group is fully divested.” I’ve asked EDF for a list of its stock market holdings and asked how EDF screens its investments.

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Klein’s question in the headline is the right one under the circumstances. But there’s another question. Why on earth were environmental organisations investing in fossil fuels in the first place?

Is it really a coincidence that these organisations invest in fossil fuels and promote trading REDD credits to offset continued emissions in the global North? Of course not. It’s the logical conclusion of the sloppy thinking behind carbon trading.

The Nature Conservancy Endowment: $950 million Investments in publicly traded securities: $1.4 billion What we know: Refused to answer any questions or to provide any details about its holdings or policies Financial statements reveal it has at least $22.8 million invested in the energy sector Has relationships with fossil fuel companies including: BP, Chevron, ExxonMobil and Shell Considering divestment? No comment

Conservation International Endowment: $25.8 million[1] Investments in publicly traded securities: $22 million What we know: Does not have any environmental screens on investments ”We do not have any explicit policy prohibiting investment in energy companies.” Patricia Yakabe Malentaqui, Spokesperson Has relationships with fossil fuel companies including: BP, Chevron, ExxonMobil and Shell Considering divestment? No comment

World Wildlife Fund Endowment: $195 million Investments in publicly traded securities: $75 million What we know: Refused to answer questions about whether it applies environmental screens to its mixed-asset funds “We don’t have direct investments, so we do not hold shares of any companies directly. Our investments are primarily through diversified funds.” Ian Morrison, Spokesperson Considering divestment? ”We are interested in the issue you’ve raised and are actively engaged in our own internal discussions in this area.” Ian Morrison, Spokesperson

Environmental Defense Fund Endowment: $5.6 million Investments in publicly traded securities: $34.6 million What we know: Did not disclose status of mixed assets, claiming information is “not public” No direct investments in fossil fuel companies: ”EDF does not own any equities or corporate bonds of fossil fuel companies.” Tony Kreindler, Spokesperson Working with Shell, Chevron, and other energy companies to promote “sustainable” fracking Considering divestment? ”No, since we don’t own any equities or corporate bonds of fossil fuel companies.” Tony Kreindler, Spokesperson[2]

Wildlife Conservation Society Endowment: $377 million Investments in publicly traded securities: $36.3 million What we know: Refused to answer any questions or to provide any details about its holdings or policies Has a subcategory of investments that includes “energy, mining, oil drilling, and agricultural businesses.” Partnered with Hess oil company Considering divestment? No comment

Union of Concerned Scientists Endowment: N/A Investments in publicly traded securities: $30 million (Note: This is the current value of UCS’ “Board reserve” fund, which includes, but may not all be invested in, publicly traded securities) What we know: Does not appear to screen managed fund investments for fossil fuels On $30 million “Board reserve”: “The reserve is invested in a variety of managed funds, and we are not directly invested with individual companies.” Cheryl Schaffer, Director of Finance & Administration From UCS’ investment policy: “In its choice of investments and of investment managers the Finance Committee will consider the broad environmental mission of UCS seeking to balance the need for strong financial performance with sustainable and responsible investment choices. The Finance Committee will attempt to seek investment managers that apply high ethical standards to their work.” Considering divestment? “UCS has not yet discussed joining the divestment campaign.” —Cheryl Schaffer, Director of Finance & Administration

Woods Hole Research Center Endowment: $4.2 million Investments in publicly traded securities: $4.8 million What we know: Investments are managed in accord with “social guidelines” for investing. “Those guidelines do not necessarily exclude all investments in all fossil fuel companies, but, in practice, none of the major multinational coal or oil companies pass their filter and their scoring system.” ”Firms must fall in the top quartile of their ranking process in order to be considered for investment. There are some small companies with interests in fossil fuel industries that do.” Eric A. Davidson, WHRC President and Senior Scientist Considering divestment? “We have recently learned that [our investment management firm] Trillium is offering its clients a new option of a fossil fuel free investment portfolio. We are beginning to study that option, but are just in the early stages of that analysis.” Eric A. Davidson, WHRC President and Senior Scientist

World Resources Institute Endowment: $38 million Investments in publicly traded securities: $13 million What we know: Refused to answer questions about whether or not it is invested in fossil fuels According to WRI investment policy: “In line with our mission, WRI is obligated to include [Environmental, Social, Governance] investment options when selecting new asset managers. We do not target a given percent of our investment allocation to ESG.” According to WRI investment policy: “Our investments support our mission and should be aligned with our mission and values such that we are not investing in companies/instruments that are less than fully transparent or insensitive to environmental or developmental issues.” Has “strategic relationship” with Shell Foundation, among other corporate relationships Considering divestment? No comment

[1] Endowment/investment numbers confirmed by each organization or taken from most recent available IRS Form 990s or audited financial statements

[2] Under US law, nonprofits are not required to divulge their holdings in the stock market. Every group mentioned was asked to provide that information; no group did. And for this reason, we are unable to independently verify that any group is fully divested.