Bill Gates’ efforts to divest from fossil fuels

In 2015, Bill Gates in an interview with The Atlantic talked of how disinvestment in fossil fuels by the big-name companies is not going to do much for the climate problem. He said the money needs to be put into R&D. 

The next year, the Bill Gates Foundation surprised everyone when a SEC filing revealed that they had sold more than $800 million worth of Exxon stock and $187 million holdings in BP. According to Guardian, the value of the Foundation’s energy holdings likely declined, and it was for financial purposes.

In his new book, “How to Avoid a Climate Disaster,” he writes that his very wealth makes him a kind of a misnomer for climate change. “I can’t deny being a rich guy with an opinion,” writes Gates, who is worth more than $137 billion and uses a private jet to travel all over the world in pursuance of his philanthropic work.“It’s true that my carbon footprint is absurdly high,” Gates writes in his new book.

Bill Gates Fossil Fuels Climate Change

“I own big houses and fly in private planes — in fact, I took one to Paris for the climate conference — so who am I to lecture anyone on the environment?” he writes.

Carbon footprints of the rich is a real issue, according to a latest research. Globally: The “1%” are the main drivers of climate change, while the poorest are hit the hardest by its consequences.

Be as it may, the philanthropic tycoon is driven by his willingness to bring about change in the world through his foundation, and eventually coming around to the idea of divestment in fossil fuel businesses.

“In 2019, I divested all my direct holdings in oil and gas companies, as did the trust that manages the Gates Foundation’s endowment,” Gates writes in the book, noting that he hadn’t held coal company shares for “several years.”

But as of the end of 2019, more than $100 million of the Gates Foundation is invested in stocks and bonds of oil and gas companies, including Exxon Mobil Corp., Chevron Corp. and BP Plc. Albeit only a small amount of the Foundation’s money is still invested in these businesses. About $1.2 billion out of the $40 billion of the total size of the endowment.

“Bill decided to sell all of his direct holdings in oil and gas companies in 2019,” a Gates family spokesperson said in response to questions about the divestment process. “We do work with third-party investment managers for a very small portion of the stock and bond holdings. They act independently and Bill does not direct those investments.” 

Divestment is not an instant process where one can withdraw money, especially for the rich. It is a slow-moving effort. Activists allow businesses a leeway of 5 years to extract themselves from their investment in fossil-fuel investments.

“In 2012, when we started the divestment movement, it was complicated for large asset owners,” said Jamie Henn, director of nonprofit Fossil Free Media to Bloomberg. “There was an assumption that you needed to maintain certain investments and unwind yourself slowly.”

A 2020 case study by the Rockefeller Foundation found that 0.05% of the endowment was still exposed, five years after it began divesting, down from about 6.6% before. The divestment movement has ballooned to around $12 trillion in global assets.

Financial powerhouses like BlackRock and Goldman Sachs have also made investments in sustainable energy businesses a priority. Fossil fuel stocks are increasingly seen as poor investments now.

Gates may advocate moving away from fossil-fuel companies, but he currently owns approximately 19% of Signature Aviation Plc, the world’s largest operator of private-jet bases. In January, Gates’s Cascade Investment LLC along with Blackstone and Global Infrastructure Partner offered to buy Signature for $4.7 billion, which will increase his stake by an additional 11%.

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Anna Domanska
Anna Domanska is an Industry Leaders Magazine author possessing wide-range of knowledge for Business News. She is an avid reader and writer of Business and CEO Magazines and a rigorous follower of Business Leaders.

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