Last week, demonstrators in Toronto decried the financial services industry's involvement with Albertan oil sands at the city's stock exchange, students at Australian National University protested a local bank's involvement with the coal industry, and New Yorkers walked down Manhattan to Wall Street to make their case for fossil fuel divestment.
The international fossil fuel divestment campaign has targeted investment banks, hefty pension funds, brand-name money men, oil CEOs and hedge funds for their oil, natural gas and coal positions.
But those same places may also be the targets of big money men who are making some major moves that could rattle fossil fuel equity markets.
As financial filings from 2014's final quarter hint, some deep-pocketed players appear to be seeing fossil fuel stocks as risky, while others have fled from global energy players to firms focused on North American exploration.
Warren Buffett sold all of his shares from two oil and gas majors -- Exxon Mobil Corp. and ConocoPhillips Co. -- worth $3.87 billion and $36 million, respectively, according to Berkshire Hathaway Inc.'s latest 13F filings. The Bill and Melinda Gates Foundation sold its entire Exxon position, too -- jettisoning $765.9 million overall last quarter. And George Soros got out of Exxon, as well, shedding $88 million worth of the stock through a put option.
Securities and Exchange Commission filings detail how the Harvard Management Company Inc., which oversees a small slice of the university's finances, sold all its shares of Kinder Morgan Energy Partners LP, an oil services and transportation firm, amounting to a $97 million sale.
The Harvard fund, as well as the California Public Employees' Retirement System (CalPERS) and the Pennsylvania Public School Employees' Retirement System (PSERS), had just upped their stakes in Kinder Morgan the quarter before. In the fourth quarter, however, CalPERS and PSERS also sold their entire positions in the firm, $63 million and $42 million, respectively.
Investment strategies certainly don't reside within an iron mold, and many investors have taken the slide in oil prices -- which have lost more than half their value since June last year -- as an opportunity.
'A wonderful, wonderful time'?
"This is a wonderful, wonderful time," Stephen Schwarzman, chief executive of the Blackstone Group, told Andrew Ross Sorkin at a New York Times conference in December. "This is a commodity. It's not patent-protected. Commodities go into undersupply and oversupply."
The Blackstone Group finished creating an energy sector-specific investment fund in late January.
Neither Buffet nor Soros, however, have exited all the oil patches.
Buffett boosted his shares in Suncor Energy Inc., an oil sands extraction company from Canada, while Soros bought shares in Houston-based Southwestern Co., a driller that specializes in the Arkoma Basin; Devon Energy Corp., an Oklahoma City-headquartered firm; and Transocean Ltd., an offshore drilling supplier that services ocean rigs.
Last summer, the University of California system declined fossil fuel divestment calls, citing shareholder activism as an alternative method to compel energy companies to curb their emissions. Other universities and public investment funds have turned down divestment calls for this reason.
Perhaps to the chagrin of environmental advocacy groups like 350.org, which has maintained that resolutions from shareholders almost always fail, Royal Dutch Shell PLC and BP PLC recently agreed to back proposals from activist investors to acknowledge the "recognized risks and opportunities associated with climate change."
The resolutions, both filed by the "Aiming for A" coalition, a group of investors from the United Kingdom who represent a pool of roughly $300 billion in holdings, call for greater accounting of greenhouse gas emissions, low-carbon energy research and development, public policy stances on climate change, and increased transparency, among other demands.
Shell and BP agree to disclose more about CO2
"We have been increasing transparency and engagement on emissions and climate change, and we have recommended support for this resolution," Shell's Kelly op de Weegh said in an emailed response regarding the company's response to the shareholders. "The big challenge, simply put, for both society and a company like Shell, is 'more energy, less CO2.'"
Robert Wine, a BP spokesman, said the shareholder request BP received "gives us the opportunity to demonstrate our current actions and build on our existing disclosures in this area."
The company's board of directors will recommend all BP shareholders support the measure at the annual shareholder meeting April 16, Wine said.
In this high-stakes game of cat and mouse, Shell's and BP's top executives also called for a price on carbon emissions in the last week.
A carbon-pricing system "would help promote natural gas as well as [carbon capture and storage], and a whole range of other low-carbon technologies," Ben van Beurden, Shell's chief executive, said in a Feb. 12 speech in London.
Bob Dudley, the chief executive at BP, backed a market-based price on carbon emissions Tuesday, five days after the Shell address.
"A global carbon price would help to unleash market forces and provide the right incentives for everyone to play their part," Dudley said in a statement. "History has shown the power of market forces in making economies less energy intensive as people have found more efficient ways to use energy."
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