The Energy Department will collaborate with foundations, universities and other investors to identify clean energy investment opportunities under a new White House program announced Tuesday.
The White House Clean Energy Investment Initiative will aim to drive $2 billion of private-sector investments toward companies working on solutions to climate change. The DOE will lend a hand by providing technical assistance and programs to potential investors.
“DOE will work to mobilize a broad range of philanthropists and impact investors to scale up investments throughout the energy innovation pipeline, from laboratory R&D to startup funding to growth-stage financing — supporting the kind of technology innovation that the ARPA-E Summit, where this initiative was announced, is all about,” the White House said in a statement.
The news comes as universities, philanthropies and some investors have sought to unentangle endowments from fossil fuel stocks. The goal of that divestment campaign is to pressure fossil fuel companies to abandon carbon-based energy reserves in hopes of keeping greenhouse gas emissions that scientists blame for driving climate change locked underground.
While the divestment effort has been picking up steam, it’s still small. University endowments across the country, for example, have invested $23 billion in energy stocks — a small fraction of the $3.8 trillion market capitalization for the top 200 fossil fuel companies as ranked by reserves.
The White House effort, while not specifically mentioning divestment, will tack onto a movement that’s seen traditional financial firms such as Morgan Stanley begin to offer curated portfolios for climate-minded investors.
“Mission-driven investors — such as foundations, university endowments, and institutional investors — can play a catalytic role in accelerating the transition to a low-carbon economy. A growing number of such organizations have committed to investing in clean energy innovation and solutions to climate change, in pursuit of both financial returns and mission-aligned impact,” the White House said.
Still, many universities — including Harvard University and Duke University — have chosen to avoid fossil fuel divestment. And while some cities have voted to divest their budgets from such stocks, activists haven’t yet persuaded any municipal pension funds to pull the hundreds of billions of dollars wrapped up in fossil fuel companies.
While foundations can control their funds based on moral reasons, pension boards are managed by fiduciaries who must represent the best interests of their beneficiaries. With fossil fuel stocks still providing a handsome and often predictable return, many have been loath to dump such companies.
But activists pushing for fossil fuel divestment argue those stocks will depreciate if countries continue to implement climate change policies that make it more difficult or expensive to emit greenhouse gases. That, they say, will coerce companies into leaving oil, natural gas and coal in the ground while deterring exploration for more resources.
