Press Release / March 25, 2014

Schwarzenegger’s multi-million dollar ‘robo-fund’ company terminates tropical forests

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Movie-star Governor turned environmental champion Arnold Schwarzenegger is part owner of an investment company backing some of the world’s most destructive logging companies, Global Witness reveals today. The company, US-based Dimensional Fund Advisors (DFA), manages US$ 338 billion for clients worldwide, and bills itself as a ‘pioneer in financial engineering’, emphasising its use of the ‘science of capital markets’ (1).

New Global Witness research is documenting the links between financial institutions and 50 of the world’s biggest tropical forestry companies (2). It shows that DFA holds shares totalling US$ 174 million in 20 of the 50 companies chosen for the study, more than any other financial institution. This includes firms implicated in highly destructive, and sometimes illegal, activities wiping out the rainforests of Borneo (3).

"Before he became Governor and an environmental activist, Arnold Schwarzenegger made his name as a killer robot from the future; now he's making a fortune from a robo-fund company that is helping to destroy our future”, said Andrew Simms of Global Witness. “Is this a case of life lethally mimicking art?”

According to a Statement of Economic Interests from 2011 (4), Schwarzenegger’s stock in DFA is listed in the highest category of ‘more than US$ 1 million’, and his annual dividends listed as ‘more than US$ 100,000’, also the highest category. Press reports indicate that Schwarzenegger’s ownership in the company is estimated at 5 per cent (5). This would mean the value of his stock and dividends are likely to be considerably higher than the minimum figures officially disclosed – which did not require his full stock value to be declared.

Global Witness is concerned that Schwarzenegger’s investments in DFA conflict with his high profile work in tackling climate change and deforestation, which include spearheading California’s efforts in this area through the ‘Governor’s Climate & Forests Task Force’.

The industrial-scale deforestation caused by some of the companies that Mr Schwarzenegger profits from accelerates the climate change that he wants to stop. In environmental terms, it’s a weaponised contradiction”, said Simms. “The world is losing fifty soccer fields of forest every minute and private finance is fuelling the destruction. To put his money where his mouth is, he needs to get DFA to cut its investment in these companies or get out of DFA himself”.

Tropical forests harbour half of all terrestrial plant and animal species and store carbon that would otherwise accelerate climate change. One in five people world-wide also rely directly on forests for their daily needs. Awareness of the state of the world’s forests has ebbed in recent years but new data reveals deforestation is a worsening problem with almost 1 million square miles of forest lost since 2000 (6).

Private finance for tropical forestry has increased notably in recent years (7). Some progressive banks and funds carry out heightened due diligence to root out links with rainforest clearance and associated human rights violations. The Norwegian Government Pension Fund, for example, has investigated and subsequently blacklisted more than 20 forestry companies since 2010 due to concerns over their long-term business models being unsustainable. This included blacklisting at least four companies which DFA holds shares in: Barito Pacific, Berjaya Corporation, Ta Ann and WTK (8).

“DFA’s trading algorithms seem devoid of any regard for tropical forests or the people that depend on them”, said Simms. “At the moment, when the computer says yes, you can almost hear the sound of chainsaws whirring. Clients of DFA that do not wish to be associated with tropical deforestation and the havoc it causes should divest unless DFA commits immediately to implement robust forestry policies” (9).

‘Scientific’ approaches to investment rely on complex algorithms which have become increasingly common in capital markets. They are meant to reduce risk and improve returns but can go badly wrong, as the financial crisis of 2007-08 showed. DFA’s Director and Consultant Eugene Fama is often referred to as the father of the ‘efficient market hypothesis,’ but also downplayed the threat of the housing market to the economy, just prior to the housing-led crash (10). In both the housing market and the industrial-scale tropical forestry sector, apparently sophisticated investment vehicles have proved blind to profound risks and are unsustainable in different ways.

Global Witness put its concerns to DFA and Arnold Schwarzenegger for comment, but received no reply.

Editor’s notes: 

(1)  Dimensional Fund Advisors, “The Science of Investing”, page 5,

(2)  Research undertaken by Global Witness ( and Profundo ( examined all known loans, bonds and shareholdings, for the period 2010 – 2013, connected to 50 of the world’s biggest companies with significant logging or pulp & paper divisions affecting tropical forests.

(3)  DFA hold shares in notorious forestry companies such as Sinar Mas, Ta Ann, Barito Pacific, WTK, DLH and Rimbunan Hijau. All of these companies have been linked to highly destructive operations while some, including WTK, DLH and Rimbunan Hijau, have also been implicated in illegal activities.

(4)  Data from the California Fair Political Practices Commission. Schwarzenegger’s Statement of Economic Interests 2011 is the latest available disclosure of his financial interests, being his last year in office.


(6)  Data from the University of Maryland and Google, 2013. The world lost 2.3 million square kilometers of tree cover between 2000 and 2012 - the equivalent of losing 50 soccer fields’ worth of forests every minute for the past 13 years. 2.3 million square kilometers equals 0.88 million square miles.

(7)  Assuming private investment is pegged to capital expenditure, which increased from US$ 17.3 billion to US$ 22.2 billion from 2010-12, “Global Forest, Paper and Packaging Industry Survey: 2013 Edition – Survey of 2012 results”, PriceWaterhouseCoopers, 2012.


(9)  Prominent clients known to invest with DFA include Kellogg’s, Boeing and Pepsi, as well as a wide range of public sector investment funds, including the California Public Employees’ Retirement System, City and County of San Francisco and University of California Retirement System. DFA partial client list:, accessed February 2014. This webpage appears to have been taken down by DFA after Global Witness contacted DFA about its concerns. A saved copy of the client list is available upon request.

(10)   Krugman P, “How did economists get it so wrong”, 2009,

(11)   Global Witness intends to release a series of findings from this research study over the coming months, in advance of making the consolidated main findings available via a web-based dataset.

Oliver Courtney, [email protected], +44 7912517147.