Turn and turn about from Gates Foundation on investments

On 8 January, a Los Angeles Times report suggested that the Bill & Melinda Gates Foundation had holdings in many companies that fail tests of social responsibility and may contribute to some of the maladies the Foundation is trying to alleviate. It is, for example, a major investor in oil companies responsible for pollution in the Niger Delta region, and in 2005 it held nearly $1.5 billion worth of stock in drug companies criticized for restricting the flow of key medicines to poor people in developing nations.

A senior policy officer at the Foundation retorted that its investments are managed with one goal: to generate returns ‘that will allow for the continued funding of foundation programs and grantmaking’. Then, on 10 January, in what was apparently a change of heart, the Foundation announced that it would review its investments to determine whether its holdings were socially responsible and that the founder and his wife would personally assess these matters.

Some four days after that, however, in what the UK’s Financial Times described as ‘a snub to the ethical investment movement’, Foundation CEO Patty Stonesifer said that it would keep its current approach to investing its endowment. In a letter to the Los Angeles Times, she said: ‘Changes in our investment practices would have little or no impact on these issues. While shareholder activism has worthwhile goals, we believe a much more direct way to help people is by making grants and working with other donors to improve health, reduce poverty and strengthen education.’ Chief Operating Officer Cheryl Scott’s 11 January statement published on the Gates Foundation website sets out the Foundation’s ‘investment philosophy’ in more detail.

Sources
LA Times, 8, 11, 14 January 2007, Financial Times, 12 January 2007.
See also http://fconline.fdncenter.org/pnd/10005790/story

For more information
www.gatesfoundation.org/AboutUs/Announcements/Announce-070109.htm