Legal Opinion: Is Divestment from Fossil Fuel Companies Consistent with Fiduciary Duty?

The Interfaith Center on Corporate Responsibility (ICCR) recently requested an opinion from Covington & Burling LLP, asking them to consider whether divestment from fossil fuel companies is consistent with fiduciary duties. This legal opinion has now been finalized and provides an explanation of fiduciary duties, stating in part that: "the foregoing provisions, especially the duty of loyalty, likely preclude a fiduciary from eliminating the entire fossil fuel industry from its portfolio without looking at each investment that would be effected on a case-by-case basis."

The opinion also quotes statements by the Presidents of Harvard University and Tufts University, and states that Covington & Burling "believe[s] these same considerations will constrain many churches, charities, educational institutions and non-profit organizations from subscribing to the divestment strategy advocated by the fossil free movement."

Download the full legal opinion from Covington & Burlington LLP.