Despite public pledges from environmental groups and universities to combat climate change and divest from fossil fuels, many of these institutions are secretly investing in and benefitting from overseas funds that support oil and gas projects. That’s the conclusion of a recent, in-depth investigation by NBC News into the “Paradise Papers,” documents leaked in late 2017 that provide insight into offshore investing.
According to NBC, the Paradise Papers provide “a rare glimpse into sometimes secretive financial entanglements with fossil fuels. That includes stakes still owned by nonprofits that have made public commitments to divestment…”
The investigation found that many of these environmental groups and institutions are either invested in energy stocks, or receive money from foundations that are invested in energy stocks, often through private equity holdings. This revelation exposes the hypocrisy behind activist groups’ “keep it in the ground” rhetoric and fervent calls to divest.
For example, the American Museum of Natural History is a strong advocate for addressing climate change, no longer directly holds stocks in fossil fuels, and has told investors that it has cut overall investments in fossil fuels in half. However, the Paradise Papers exposed that they hold fossil fuel investments made through the international private equity firm Denham Capital. NBC reports that “the Denham fund has invested in energy projects around the world, including fracking for shale oil in the Ohio and Pennsylvania region. It bid unsuccessfully for Mongolian coal.”
The World Wildlife Fund (WWF) is also invested in the Denham Capital fund, “along with two other private equity concerns that are invested in fossil fuels.”
In addition, NBC found that many environmental activist groups receive grants from foundations that are the beneficiaries of profits coming from oil and gas projects. For example, the David and Lucile Packard Foundation has an endowment worth more than $7 billion and has given dozens of grants to environmental groups such as the Natural Resources Defense Council (NRDC) and the Nature Conservancy. NBC reports, “the Paradise Papers show the Packard Foundation put $50 million in the private equity concern Energy Capital Partners III L.P., which financed oil and gas infrastructure.”
This isn’t the first time this has all come to light either. Back in 2015, articles highlighting divestment announcements by the Rockefeller family forgot to mention that, in addition to the Rockefellers themselves not personally divesting from anything — and the Rockefeller Foundation also not divesting — the Rockefeller’s much smaller charity, the Rockefeller Brothers Fund (RBF), was only removing coal and oil sands stocks from its portfolio. Why is this interesting? Even 350.org, the biggest proponents of divestment, continues to receive grants from RBF, a fund that continues to invest in fossil fuels, while the organization continues to pressure other groups, like the philanthropic Gates Foundation, to divest.
The Paradise Papers prove that, while they may not want to admit it, some of the most vocal activist environmental groups that oppose oil and gas production are reaping the financial benefits of investments in the industry – bringing the hypocrisy of the divestment movement to a whole new level.