Prince of Wales’ move comes as seven UK-based charitable foundations announce their fossil fuel divestment on financial and ethical grounds

The Prince of Wales is on the brink of eradicating all fossil fuel investments from his financial holdings, becoming the latest high-profile addition to a fast-growing and UN-backed divestment campaign.

It is calling on investors to sell their stakes in coal, oil and gas because world reserves are already several times greater than can be burned while keeping climate change in check.

Prince Charles has frequently voiced the need for rapid action on global warming, referring recently to the Earth as a “sick patient”. He does not comment publicly on his personal financial dealings, but sources at Buckingham Palace told the Financial Times that “his private investments and his charitable foundation do not have any fossil fuel holdings”.

How much fossil fuel has been used in your lifetime? Read more

Prince Charles also draws income from the £900m Duchy of Cornwall and a spokesman told the Guardian: “The Duchy of Cornwall does not have any direct hydrocarbon investments. A review of collective investments is currently being undertaken.” Direct investments are understood to be stakes in specific fossil fuel companies, while collective investments are funds composed of a range of companies.

The divestment campaign also received a boost from seven UK-based charitable foundations, worth a collective £234m, which have decided to sell their fossil fuel investments on financial and ethical grounds and re-invest the money in green businesses. A statement from the group, which includes three trusts linked to the Sainsbury family, said pledges by governments to act on climate change and tumbling renewable energy costs meant fossil fuels were no longer sound investments.

Facebook Twitter Pinterest Why we need to keep fossil fuels in the ground - video

“Fossil fuel companies have not taken the opportunity to wind down or change their business models,” says the statement from the Mark Leonard Trust, the JJ Charitable Trust, the Ashden Trust, the Waterloo Foundation, the Tellus Mater Foundation, the Polden-Puckham Charitable Foundation and the Frederick Mulder Foundation. “They are now significantly overvalued. The half a trillion dollars spent annually seeking new reserves will be wasted. The smart investors have already divested from coal.” The World Bank and Bank of England have warned previously of the serious risk action on climate change poses to fossil fuel assets.

Life after divestment: how to spend the money saved from fossil fuel investments Read more

The statement from the charitable foundations said the decision to divest was also a moral one: “We aim to support, not undermine, our philanthropic work to address poverty, improve health and protect the earth’s life support systems. We cannot, in good conscience, invest in companies that are accelerating climate change, which disproportionately affects the poor.”

The National Trust is reviewing its investments in fossil fuels, according to the Financial Times, as is the Church of England, which has a £6bn endowment. However, the Royal Society, the UK’s premier science academy and prominent advocate of action on climate change, has not committed to divestment and neither has the $4.4bn Children’s Investment Fund Foundation, which funds climate change work through groups such as the European Climate Foundation.

A series of analyses have shown that existing fossil fuel reserves are several times greater than can be burned if the world’s governments are to fulfil their pledge to keep global warming below the danger limit of 2C. A Guardian campaign is calling on the world’s biggest health charities, the Bill and Melinda Gates Foundation and the Wellcome Trust, to join over 200 institutions that have already divested from fossil fuels. The Guardian Media Group announced earlier in April that it will divest its £800m fund, the largest to date to sell off all fossil fuels.

The suggestion that charitable trusts and foundations have a fiduciary duty to invest in all sectors to protect their funds and maximise returns is rejected by Luke Fletcher, a lawyer at Bates Wells Braithwaite, a firm which works with more UK charities than any other.

“Trustees and investment committees have the duty to make sure that investments are ‘suitable’ for the charity and are properly diversified. However, this is not a duty to invest in all asset classes,” Fletcher told Charity Finance magazine, citing a 2014 Law Commission report.

“What is suitable should also be seen in light of the objects of the charity – an investment is absolutely not suitable if it conflicts with the objects.” he said. “Finally, the reputation of a charity is one of its most critical assets. ‘Business as usual’ is increasingly seen as unacceptable and a charity that continues to invest in carbon-intensive assets might find that, as science and public opinion changes, it risks seeing its reputation become a stranded asset.”