By Taylor Kuykendall

A new coalition of U.S. and international foundations is calling on other organizations to join in its divestment from fossil fuel companies in favor of investments in the "clean energy economy."

Divest-Invest Philanthropy is a coalition of 17 foundations with an asset base of nearly $2 billion. The coalition says there are both financial and ethical risks in remaining invested in fossil fuels in the face of available science on climate change and the effects of fossil fuels on the planet and the economy.

Ellen Dorsey, executive director of the Wallace Global Fund, started the effort. As of Jan. 30, the fund will pledge to use all of its assets to advance its goals, values and beliefs, she said.

"A prudent fiduciary would look at the long-term viability of fossil fuels investments and act now," Dorsey said on a Jan. 30 conference call with several of the participating foundations. "We feel confident of comparable or superior returns for our endowment portfolios without fossil fuels. This confidence is not magical thinking, but rather rooted in number-crunching financial analysis and our own real-world experiences."

Dorsey said the Wallace Fund has already substantially divested from fossil fuels, and the performance of its overall portfolio has been "excellent."

Tom Van Dyck, investment consultant to signatories Education Foundation of America and the Park Foundation, said fossil fuel companies already hold enough fossil fuel reserves that, if burned, could push the global climate to catastrophe. He said that with the continuing push for action on climate, there is a heavy risk that those reserves and other capital investment will become stranded.

"It's not just about values," he said. "It's about valuation. It's about the risk that you are taking as a shareholder holding these companies."

Olivia Farr, board chair of the John Merck Fund, said her organization believes it needs to respond to climate change with every asset available.

"If we don't, we won't have a livable planet to do our work and fulfill our mission," Farr said. "It's that simple."

Farr said the John Merck Fund, now 97% divested from fossil fuels, became interested in divestment when it realized it was funding efforts to alleviate the effects of climate change while simultaneously holding investments in fossil fuel companies. She said investing all its assets, not just a sliver of grant funds, toward foundation goals such as clean energy is the best method to accomplish its mission.

"We can't rely only on federal and state policies to create change," Farr said. "We need to move faster than that. We need to move markets to make progress on climate change and our own program goals. So, voting with our dollars in the marketplace has become an increasingly useful tool."

Richard Woo, chief executive officer of the Russell Family Foundation, said climate change affects all foundations on the planet, regardless of mission. By extension, he said, fossil fuel interests are undercutting the mission of all foundations.

Other foundations interested in divestment, Woo said, should not feel intimidated by the seemingly complex process of divesting from fossil fuels. "If you take it in incremental steps and you focus on progress and not perfection, at least to begin with, you can make real advances," Woo said.

The movement toward divestment from fossil fuels, the coalition noted, began on college campuses two years ago and has since spread to cities, states, pension funds and religious institutions. Divest-Invest said in a news release that more than 50 institutions in the United States alone, including nearly two dozen cities, have committed to divest.

A study by the Smith School of Enterprise and Environment at the University of Oxford found that the coal industry is particularly susceptible to threats of investor divestment in fossil fuels.

Other signatories to the Divest-Invest Philanthropy include Ben & Jerry's Foundation, the Chorus Foundation, Compton Foundation, the Educational Foundation of America, Granary Foundation, Jesse Smith Noyes Foundation, Joseph Rowntree Charitable Trust, KL Felicitas Foundation, Nia Community Fund, Schmidt Family Foundation, the Sierra Club Foundation, Singing Field Foundation and the Solidago Foundation.