The Guardian Media Group (GMG) is dumping more than £800 million (US$1.2 billion) in coal, oil, and gas investments, explaining that the stocks have performed poorly in recent years and are vulnerable to future action on climate change.
“It is a hard-nosed business decision, but it is influenced by the values of our organization,” said GMG Chair Neil Berkett. The “stellar” performance of one of the company’s ethical funds “means we can adopt socially responsible investment criteria without putting at risk the core purpose of GMG’s investment funds: to generate long-term returns that guarantee the financial future and editorial independence of the Guardian in perpetuity.”
The paper is owned by an independent trust established in 1936.
“We found that a number of alternative investment categories have out-performed natural resources in the last few years, with recent falling valuations in basic commodities harming those funds that are heavily exposed to coal or oil,” Berkett explained in a separate opinion piece. “The returns from fossil fuel companies could be further compromised, fully justifying divestment, as it becomes clear that many of their resource reserves are overvalued.”
GMG will take a “couple of years” to sell off its direct fossil fuel holdings, five years for “co-mingled” funds that contain some fossil fuel assets.
“I’m really delighted that GMG, having independently considered all the evidence, has decided to divest out of fossil fuels,” said Guardian Editor-in-Chief Alan Rusbridger. “What was a trickle is becoming a river and will, I suspect, become a flood. I’m glad that GMG is ahead of the trend.”
Rusbridger previously announced that the Guardian had joined with 350.org to urge two of the world’s biggest charities, the Bill and Melinda Gates Foundation and the Wellcome Trust, to divest their fossil fuel assets.