At a time when the Bill and Melinda Gates Foundation has been under unprecedented pressure to commit to fossil fuel divestment, their annual tax filings were released last week. The filings revealed that the Foundation's investments in fossil fuels have dropped by almost two-thirds, from a huge $1.4 billion to a significantly less huge $475 million. Almost all of that drop can be accounted for by their decision to shed their portfolio of Exxon Mobil, a whopping $824 million share in the company reduced to naught with the stroke of a pen.
This is, of course, a great development, and one that should be applauded by all of the health professionals, faith leaders, politicians, Gates' funded scholars, international newspapers and activists that have been calling on the Foundation to divest for months. The news is only made sweeter by the fact that we are talking about Exxon after all. A company that having been told by their own scientists that climate change was being caused by the burning of fossil fuels, chose to bury the information and spend millions on spreading doubt and disinformation; a company that embodies everything grotesque within the fossil fuel industry. As such, when an institution of the moral and economic influence of the Gates Foundation chooses to disassociate itself from such a company that can only be a good thing, a massive step in the right direction.
However, given that these developments were only revealed by the legal obligations of the Foundation's tax filings and were accompanied by no announcements, no moral stance, the same question is now being asked by many, from divestment activists to the front page of Bill and Melinda' local paper, The Seattle Times. And that is the question of why?
On the Foundation’s website it states that: “When instructing their investment managers, Bill and Melinda also consider other issues beyond corporate profits, including the values that drive the foundation's work. (...) That's why the endowment doesn't invest in tobacco stocks.”
So that's the question: Have Bill and Melinda dumped Exxon because they find their corporate activity, their funding of climate denial and their hiding of their own science, to be egregious, to not be in line with the moral values of the Gates Foundation's work; or is it simply because Exxon has been consistently under performing the market for years? Is it, in other words, economics or ethics?
To many divestment activists these are important questions. The real power of divestment, they argue, is not in its financial impacts, rather it is in its ability to smear the reputations of fossil fuel companies, to stigmatize the industry. And that's something that only happens when divestment is coupled with a moral statement.
To others, however, the Gates' divestment is a sign that the divestment movement is getting through to even those who dismiss it as a strategy. “The Gates Foundation has a history of responding to public pressure, while simultaneously not admitting they are responding to public pressure,” says Mike McGinn, former Seattle Mayor and a leader with Seattle-based group Gates Divest. And he may have a point. Just last year the Foundation quietly removed all of its stock in G4S, a British security firm that was a prominent target of the Boycott Divestment Sanctions movement for its role in equipping Israeli forces occupying the West Bank. The catch? The Gates Foundation never acknowledged its action as prompted by BDS or anyone else.
So while there are many divestment activists who think Gates is still missing the point, perhaps that's not the right way to look at this. Yes, by refusing the use their moral voice the Foundation is refusing to contribute to a stigmatization process that, according to Oxford's Stranded Assets report, can make it much harder for the fossil fuel industry to recruit good people, to influence policy and to raise capital; but, perhaps the right way to look at this is that is as a win, and a huge one at that. Because this is a win that shows that even those who have been stubbornly resistant to the logic of divestment are beginning to see the folly of remaining invested in a product of the past.