The Wellcome Trust has defied fossil fuel divestment campaigners and increased its investments in coal, oil and gas over the last year.
Campaigners said the news was “hugely disappointing” and put the health research funding charity “on the wrong side of history” after the global climate change deal reached at UN talks in Paris earlier in December. The trust did sell its £142m stake in Shell, but increased other investments including those in the mining companies BHP Billiton and Rio Tinto.
The trust says it “considers climate change to be one of the greatest contemporary challenges to global health” but has resisted calls to sell its holdings in fossil fuel companies.
Scientists agree that most fossil fuel reserves must remain in the ground if climate change is to be limited to 2C, and institutions including the World Bank have warned about the financial risk posed by fossil fuel assets. In June, 1,000 medical professionals, including the editors of the Lancet and the British Medical Journal, praised the trust’s work, but asked it to consider the core medical value of “first, do no harm” and divest from fossil fuels. More than 236,000 people have backed the Guardian’s Keep it in the Ground campaign, which which also calls on the trust to divest.
The Guardian’s analysis of the trust’s annual reports and financial data from Reuters reveals that it:
- Increased the value of its main fossil fuel stocks - BG, BP, Rio Tinto and BHP Billiton by somewhere between 5.2% and 27% from 2014 to 2015 (limited data disclosure means the exact increase is unknown)
- Increased the number of shares held in BHP Billiton by 35%, Rio Tinto by 25% and BP by 12% between the middle and end of 2015
- Has increased the number of shares held in the oil and gas multinational BG, which is is subject to a takeover bid by Shell, by at least 300% since Sept 2014
- Held a £142m stake in Shell in September 2014 but had sold it by August 2015
- Owns a £22m stake in the oil and gas company Ophir Energy, which is active in Africa, and a £9m stake in Nostrum Oil and Gas, which operates in Kazakhstan.
A Guardian analysis estimated the trust had lost an estimated £175m on its investments in fossil fuel companies in the year to August 2015, and the companies’ share prices have fallen further since. In November, a Corporate Knights analysis suggested it would have been £238m better off had it divested in 2012.
Coal investments have suffered most. The investment bank Goldman Sachs said in January that the fuel had reached “retirement age” and the International Energy Agency head, Fatih Birol, said recently that the industry was facing “huge pressures”. The Wellcome Trust, however, ramped up its stake in BHP Billiton, whose coal reserves are equivalent to the annual emissions of the US, EU, India and Russia combined.
Danielle Paffard, a UK divestment campaigner at 350.org, said: “It’s hugely disappointing that a mission-driven organisation like the Wellcome Trust should be choosing, after everything that’s just happened in Paris, to plant themselves on the wrong side of history by continuing to back fossil fuels.
“I hope those at the trust reflect on the implications of their actions, and the type of world they play a role in shaping.”
Bill McKibben, a prominent divestment campaigner said: “The links between climate change and human health have never been clearer. It’s almost as if the Wellcome Trust is investing in tropical disease and natural disaster. It’s kind of hard to believe they’re doubling down, just when even people like the governor of the Bank of England are pointing out the problem.”
A spokeswoman for the trust said: “The Wellcome Trust believes that engagement with the small number of energy and resource companies in which we invest will make the strongest contribution to reducing carbon emissions, but we understand and respect the views of those who disagree.“Wellcome’s long-term investment strategy has led to a total return of over £10bn since September 2008 ... The portfolio returned £1.1bn or 6.1% in the year to 30 September 2015, despite a difficult market backdrop. We aim as a result to be able to spend up to £5bn on our mission of improving health over the next five years.”
Dr David McCoy, the director of the medical campaign group Medact, said: “It is now established that climate change is the greatest health threat of the 21st century. To hear that the Wellcome Trust is investing heavily in the industries that are driving the problem is deeply disturbing. It sends a message that the foundation does not believe this conflicts with their aim to improve health for everyone, or their duty as a charity to act in the public interest.”
