Rockefeller Brothers Fund at early phase of examining possible Israel divestment

Investor says it is actively considering follow-up to its fossil fuel exit

The Rockefeller Brothers Fund (RBF), the $866m (€768m) charitable foundation that caused worldwide headlines with its fossil fuel divestment plans last year, is actively considering divesting from Israel over its “occupation” of Palestine, according to its President Stephen Heintz.

Speaking at an international divestment conference in Paris today (September 1), he said the fund’s fossil fuel exit had caused it to examine other areas to try to be “consistent”.

Questioned by Responsible Investor, Heintz said that as a grantmaker, the fund supports Israeli and Palestinian groups and other bodies working for peace in the Middle East. “We’ve spent time in Israel and Palestine to understand the depths of the crisis,” he said.

“The question is whether the conflict is perpetuated by economic factors. We are in the early phases of examining this as an institutional investor.” He stressed the fund didn’t want to “isolate” Israel, though Heintz said he personally wasn’t supportive of its policy towards the Palestinians.

The fund’s assets are managed by Perella Weinberg Partners, via an outsourced CIO arrangement put in place last year. Part of the process has included a“comprehensive assessment of all of the Fund’s investment practices, including the possibility of future shareholder engagement activities such as proxy voting”, the fund has said in the past.

Among the fund’s trustees are Hugh Lawson, recently named to head environmental, social and governance (ESG) at Goldman Sachs Asset Management.

“This isn’t about punishing the state of Israel or the economy of Israel,” Heintz added. Rather it was a way of tackling the “narrow economy” that profits from the occupation of Palestine.

“This is hard to do politically and we are in the early stages of the process like the climate divestment question two years ago.”

The fund’s ‘peace-building’ program is currently focusing a “significant portion” of its grantmaking on the wider Middle East. If it does divest, the decision is likely to prove controversial. Not only have investors such as PGGM and Norges Bank Investment Management faced diplomatic rows for divesting from companies with Israel links, but in 2014, a Jerusalem-based body called NGO Monitor analysed the fund’s grants, which Jewish/Israel news portal said risked “delegitimizing Israel”, a claim that Heintz denied to JNS.