The Divestment That Never Was

Gates’s divestment promise, made in his 2021 New York Times best-selling book, How to Avoid a Climate Disaster: The Solutions We Have and the Breakthroughs We Need, was more than a financial decision. It also signaled the billionaire’s premiere as a leader on climate change.

When first confronted with the idea, Gates wrote, he questioned the utility of divestment as a means to steer the carbon-dependent world economy on the right course. South Africa’s apartheid regime had proven sensitive to economic pressure, he said, and ultimately collapsed, in part due to a global divestment push. But energy, “an industry worth roughly $5 trillion a year and the basis for the modern economy,” could not be expected to change merely “by selling the stocks of fossil-fuel companies.”

Nonetheless, Gates said, he did not want to profit from an energy sector that was betting on a carbon-dependent economy.

“I’d feel bad if I benefited from a delay in getting to zero. So in 2019, I divested all my direct holdings in oil and gas companies, as did the trust that manages the Gates Foundation’s endowment,” he wrote, referring to the Gates Foundation Trust.

When How to Avoid a Climate Disaster came out, two years after Gates had ostensibly ordered the divestment, the trust still held hundreds of millions of dollars in oil and gas stocks and bonds. But in the years since, those investments have only grown, and not merely because certain stocks or bonds proved to be good investments. The trust’s stake in Japanese oil and gas company Inpex Corp, for instance, rose 32 percent from the end of 2022 through the end of 2023, to over $122 million, despite Inpex stock increasing less than two percent over the same period.

Though the trust’s IRS disclosures don’t say, it appears the trust bought more stock in the company.

A Very Careful Choice of Words

What should we make of Gates’s divestment pledge?

The language is worth paying attention to. If we’re being exceptionally generous to Gates, we might say that he made a narrow promise that wasn’t all that hard for the trust to keep. “Direct investments” is a technical term that means investing in a company’s physical assets or just controlling so much of its stock that it can assert influence over the company’s management. Owning an oil well counts; owning a small portion of an oil company’s stock — even a portion worth tens of millions of dollars — does not.

But if the Gates Foundation made a distinction between “direct investments” and any other kind of investment, it didn’t insist on the clarification in media coverage about the decision. The headline of a sympathetic 2021 Bloomberg article said that Gates’s promised divestment effort “shows how hard it can be to divest from fossil fuel.” Summarizing Gates’s promise, the story added that Gates “says he’s decided to dump all his oil and gas assets.”

But if Gates’s words about oil and gas left some room for interpretation, his claims about coal were unambiguous.

Alongside his claim about dumping any “direct investments” in oil and gas in 2019, Gates said he “hadn’t had money in coal companies for several years.”

But in 2019, the trust recorded a $5.6 million stock investment in Glencore, the Swiss commodities giant whose hands touch a wide swath of the world’s materials and energy trades, including both oil and coal. As of 2023, that stake had increased to $16.2 million in stock — a nearly threefold increase during a period when the stock merely doubled — and $2.7 million in bonds.

Glencore had announced a divestment from coal in November 2023, well after Gates said he had instructed the trust to back off coal. But by the following year, the company had reversed that decision under pressure from shareholders.

In other words, the company has been in the coal business for a long time, and it only briefly considered getting out.

The Latest in a Pattern

It’s not unusual for billionaires to keep their assets in oil and gas, of course. If you have a 401(k), you’re likely invested in the sector yourself. But Gates stands out — not only for his claim to be getting out of the business but also for his attempts to anoint himself a leader on climate change.

For as long as Bill Gates has been a philanthropist, he’s latched onto popular “world-saving” causes, from population control to polio eradication to standardized testing in schools, each time using his wealth and public relations muscle to appoint himself to a leadership role despite a total lack of qualifications and then changing the foundation’s programmatic direction to follow his lead.

Climate change is only the latest cause, and for Gates, it was a convenient way to endear himself to the public all over again as his marriage to foundation cofounder Melinda French Gates collapsed following revelations about the software mogul’s involvement with Jeffrey Epstein.

“I think the clear takeaway is that Bill Gates is not who he says he is,” says journalist Tim Schwab, whose Substack and 2024 book The Bill Gates Problem make him one of the few consistent critical voices tracking the billionaire and his namesake foundation. Per Schwab:

Just as Gates tries to assert himself as a leader on climate change by making bogus divestment claims, similar contradictions define his entire philanthropic career. He claims his foundation is delivering innovative pharmaceuticals that are saving lives, for example, yet his foundation stands accused of stifling innovation and access through monopolistic behavior. . . . His track record of failures, which have caused incalculable harm, mean he’s the last person on Earth we should look to for leadership on climate change.

Criticism like that is almost nonexistent in mainstream publications.

In its story on Gates’s promised divestment, Bloomberg acknowledged that the trust still had hundreds of millions of dollars riding on oil and gas companies. But striking a conciliatory note, it said, “divestment isn’t a straightforward process” and that activists who pressured foundations to divest typically gave them a five-year timeline. As an example, it pointed to the Rockefeller Brothers Fund, which announced plans to divest its own multibillion-dollar endowment from fossil fuels in 2014. By 2020, the fund had cut the portion of its endowment invested in fossil fuels from 6.6 percent to 0.05 percent.

The Gates Foundation Trust’s publicly available disclosures have yet to cover five full years since Gates says he made his divestment order. But records from four years into that promised divestment effort do not evidence progress.

A History of Silence

With rare exceptions, the Gates Foundation does not answer questions about its trust’s investment philosophy, and it did not respond to requests for comment for this story.

But questions have been piling up since the foundation’s inception.

In 2000, the year it came into existence, the New York Times noted that despite its public health agenda, the foundation had invested in tobacco, having registered some Philip Morris bonds on its books. (Prior to the formation of the Gates Foundation Trust in 2006, the foundation managed its endowment itself.)

The bigger revelation came in 2007, when a Los Angeles Times investigation found children were suffering from respiratory ailments not far from a pollution-spewing oil plant owned by Eni, an Italian oil company that the foundation had invested in. In a response published on its website, the foundation wrote that Bill Gates and Melinda French Gates had ruled out investing in companies that primarily earn profits through activities the pair found “egregious,” citing tobacco companies as a business category they would not invest in. (The foundation skipped over the fact that it once had.)

In 2013, I published a story in Mother Jones revealing the trust had invested $2.2 million in the private-prison company GEO Group. The news prompted a petition and a rally in front of foundation headquarters in Seattle.

The foundation didn’t speak with me for that story, either, but it did talk to local media, in a rare instance of trying to explain away its investments. Speaking with Ansel Herz of the Stranger, a foundation spokesperson said the trust’s returns had underwritten a number of lifesaving efforts, like “making sure people living with AIDS in Africa are less likely to die.”

“The trust invests in a lot of things to make sure we have the most money we can have to do that job,” the spokesperson added.

Herz had a term for the explanation for a foundation that justifies the harm it underwrites by citing the good it does with the proceeds: “philanthro-splaining.” Most of the time when confronted with hypocrisy, the foundation doesn’t say anything at all.