Case studies

Be inspired to take action with your divestment.

Investing in the future we want to create

RS Group, Hong Kong

The RS Group has always taken environmental considerations into account as part of an integrated environmental, social and governance (ESG) investment strategy. In 2013, the Group increased its focus on climate change and developed a clearer framework on how to incorporate these considerations across the portfolio and across asset classes.

Divestment is one of three pillars in the strategic approach:

  1. Support — INVEST in a wide spectrum of climate change related solutions across mitigation and adaptation – using investment capital and philanthropic grants.
  2. Avoid — DIVEST from the most polluting sectors in the portfolio including coal, oil and gas exploration and production.
  3. Engage — ASK investment managers to engage with carbon intensive companies in sectors where the Group is still invested, in order to better understand their future strategies and any plans for diversification.

The RS Group’s decision to divest was informed by the growing DivestInvest movement. The Group also supported the Carbon Tracker Initiative, looking specifically at the “carbon bubble” and “unburnable carbon” within listed Chinese companies, which illustrate the financial risk of fossil fuel holdings.

The RS Group was aware this strategy could limit returns in times of economic expansion when demand for fossil fuels are rising. But in the longterm, it believes divestment will allow the portfolio to avoid some real risks related to “stranded assets” and lead to more resilient returns.

From an Asian perspective, climate change is not a distant threat — it is happening today.

We want to ensure that the way our capital is invested is part of the solution and not part of the problem.

RS Group Principal, Annie Chen


  1. Assessed fossil fuel portfolio exposure: the main exposure was in an equity tracker fund, and this was divested.
  2. Redirected proceeds to invest in a number of climate change related solutions: this included
    investments in funds such as SJF Ventures III Fund which accesses companies like NexTracker.
  3. Refined the investment policy to be up-front about the Group’s approach to fossil fuel intensive industries.
  4. Became a signatory of the DivestInvest movement.


  1. There is a revenue screen that avoids exploration and production companies where more than 10 per cent of their revenue comes from the coal, oil and gas sectors.
  2. Companies with a clear policy towards a cleaner fuel mix (with demonstrated results) are allowed in the portfolio. Where such investments exist, the RS Group also undertakes active shareholder engagement.
  3. We communicate with our fund managers so they better incorporate climate risks in their own investment process and when engaging with companies.

Barriers and costs

  1. The process of the initial research, understanding of divestment and the complexity and nuances of the topic, including:
    • the carbon bubble and stranded asset issue
    • the state of transition to clean fuels
    • how carbon risks are currently priced into the market and what this means to investment.
  2. Conviction from the asset owner to make the final decision – this is often the biggest barrier.
  3. We were fortunate our principal not only cared about the issue, but was also very much behind the divestment recommendation.

Formulation of RS Group’s stance and commitment to divest was informed by the divestment momentum among European pension funds and endowments, and understanding what such large asset owners are doing, in addition to the compelling argument of the divestment movement led by Bill McKibben.

Divestment execution involved minimal additional cost. We see the reinvestment of the divested proceeds as a normal part of our investment strategy. In the long run, we believe this will provide us with both financial and non-financial returns.

Who was involved?

The team provided perspectives from both the investment and philanthropy angles, and communicated its new approach to the Group’s board of trustees for approval.

How long did it take?

The Group gradually divested over six months. The updated strategy is currently active in day-to-day monitoring, as well as in evaluation of potential new investments.

Who helped?

Investment adviser, Ivo Knoepfel and the team at Carbon Tracker Initiative. Once the climate change strategy was formalised, the RS Group asked its fund managers, through an annual questionnaire, to share how climate change risks are factored into their investment strategy. The responses illustrated how many were aware of climate risks and had already been taking steps to mitigate them.

How has the portfolio performed since divestment?

Divestment did not change the fund’s performance in the short term. This is in part because of the Group’s low exposure to energy stocks and the protection this provided against losses when the oil prices dropped in 2013/14. The general performance impact is also nuanced as the Group invested in energy efficiency and the renewable sector, which may be less attractive in times of lower oil prices. On the other hand, it may be beneficial to sectors that are energy intensive, for example, airlines.

Top three recommendations

  1. Start understanding climate change risks, specifically carbon risks, and exposure to fossil fuel intensive industries.
  2. Don’t be daunted by the complexity of the topic. No one has figured it out completely, but it doesn’t mean we can shy away from this problem – taking small steps forward is better than running away from the issue.
  3. Leverage existing resources, for example research, and learn from fellow investors that have committed to divest.

Don’t be daunted by the complexity of the topic.

No one has figured it out completely but it doesn’t mean we can shy away from this problem — taking small steps forward is better than running away from the issue.

RS Group Principal, Annie Chen

The RS Group believes divestment (in whatever form) may not be for all types of investors. Realistically, if you are a large institutional investor with a mandate to invest without deviating too much from the broader indices, or for exchange traded funds, then you cannot divest from the sector. Having said that, there is a whole host of actions that can be taken that sit between “no action and no change” and “100 per cent complete divestment”.

Creating good in the world

English Family Foundation, Australia

When the English Family Foundation discovered the DivestInvest pledge in June 2015, they embarked on a surprisingly quick path to divestment. After signing the pledge, implementation was completed by the end of July.

The concept of divestment also prompted a conversation about climate change, family values and the goals of the Foundation. Founder Allan English was interviewed by Generosity Magazine shortly after, and said that signing the pledge “just made a lot of common sense, for all sorts of reasons”.

“Fundamentally, our purpose with the English Family Foundation is to create good in the world. Investing in fossil fuels is simply not aligned with our objectives. I would never portray myself as an expert in that space but I know that sustainability is of vital importance — everyone in Australia knows that.”

The clear message for the philanthropy sector is that the decision to divest is about values alignment — it’s not about where you do your grantmaking.

If we say ‘we use our values to direct our philanthropy decisions’ then I encourage everyone to look at their own personal values and how they make decisions in the world, and see if they really do align.

Allan English


The process for the Foundation was relatively straightforward:

  1. We assessed our current position in relation to our investments and investment strategy.
  2. We agreed on what we understood by the term “fossil fuels”.
  3. We considered the implementation issues of removing fossil fuels from our portfolio by looking at direct and indirect exposures.
  4. We updated the investment strategy and included the fossil fuel definition we agreed on.
  5. We implemented the changes to the portfolio.

Barriers and costs

The only barrier for us in divesting was undertaking the process. To divest, the Foundation needed to look at the risks and opportunity costs, as well as any implications for achieving its philanthropic goals. The main cost associated with the divestment process was the time spent having conversations with family members and other members of the Foundation, and then writing, signing and implementing the new strategy.

Ease of exit

The Foundation’s fossil fuel investments were highly liquid and therefore easily divested.

Who helped?

The Foundation’s existing external adviser assisted in the process.

How has the portfolio performed since divestment?

The portfolio has performed exceptionally well since the Foundation divested. Allan English has been outspoken about inadequate investment advice. He told Generosity Magazine, “I know that when foundations with a family office or investment advisers first raise the issue of divestment, the response they will get from those advisers is something along the lines of ‘If we exclude investment in fossil fuels then you’ll potentially get lesser return on our corpus’.”

“I have no expectation that I’ll be taking less returns. There are so many good investments doing good work and delivering good returns that come from an ethical base.”

Top three recommendations

  1. Take the time to understand your values and beliefs — discovery of one’s values is the first step.
  2. Identify your goals.
  3. Align your investments with your goals.

Ethical considerations aside, Allan says the smart money is on innovation. “Our role with the Foundation is to increase the value of our corpus. I see investing in fossil fuels like investing in steam trains — why would you do that when you could be investing in jet planes all over the world? There will always be a role for steam trains, and power sources will take time to shift, but it’s a case of backing those doing good as opposed to those doing harm. There’s no doubt that’s where the future lies.”