Last year when I visited the US, Peter Lipman (Chair of Transition Network) and myself had supper with representatives from 3 large philanthropic organisations there. At one point, Peter asked “so do you invest in coal?” There was some discomfort around the table, and the reply was “no, coal is a terrible investment!” – the clear implication being that if it had been a good investment the answer would have been a different one.
- Assess: Conduct an assessment of your exposure to climate change risk, defining the degree to which you are invested in fossil fuels versus climate solutions and investments that support your mission.
- Consult: Launch a dialogue among Board and Staff on investment strategies that align investments with mission and support a sustainable and just economy.
- Commit: Commit to a timetable and process, commensurate with the pace of climate change, for eliminating all fossil fuels from your investment portfolios while investing in a new, clean energy economy through renewables, clean tech and other innovations.
“Investment means allocating endowment assets to sustainable, fossil-free investments in climate solutions and the new energy economy. Fossil-free investment opportunities exist across all sectors of the economy and across all asset classes of a diversified investment portfolio, from conventional asset classes such as cash, fixed-income, and public equities (stocks) to alternative asset classes such as hedge funds, private equity, real estate, farmland and timberland, and other commodities and real assets. Investors can invest in clean technology and renewable energy sources such as wind and solar and incorporate environmental, social and governance (ESG) factors into fossil-free investments in other industries, and move their money to more resilient community investing institutions. All portfolios can be readily structured around themes of climate-related strategic asset allocation, carbon risk mitigation, sustainability solutions, and positive environmental impact”.