Leveraging Foundation Endowments to Fight Climate Change

An increasing number of foundations are moving their money out of environmentally harmful investments such as fossil fuels and into climate solutions. This page shares strategies and committments by foundations to leverage their endowments to slow down the effects of climate change and invest in bold solutions. Together, these committments showcase the various ways that foundation endowments can be used to address today's urgent challenges. Contact Laila Hussain if you have any questions or additional resources to share.

 

Visit the MIE Endowment Investing Library for more resources on mission-related investing.

 

 

The McKnight Foundation has committed to achieving net zero greenhouse gas emissions across its $3 billion endowment by 2050 at the latest. Net zero can be achieved by reducing greenhouse gas emissions in McKnight’s existing portfolio while also making new investments to build a carbon-free economy. To reach net zero, McKnight will fully leverage its opportunity as an owner of assets, a customer of financial services companies, a shareholder, and a market participant.

 

 

Ford Foundation is planning to end further investment in fossil fuels and seek out additional climate-friendly investments. Ford’s investment strategy is two-fold: protect the planet by ending investment of further assets in the endowment into fossil fuels, and seek opportunities to invest in alternative and renewable energy in the future. Going forward, the foundation has pledged to invest in funds that address the threat of climate change, and support the transition to a green economy.

 

 

In September 2014 The Rockefeller Brothers Fund (RBF) announced it would divest from all fossil fuels. With a mission to advance social change that contributes to a more just, sustainable, and peaceful world, RBF knew it had to ensure all of its assets – not just the required 5% – were aligned with this mission. Since committing to fully align its investments with its mission, RBF has cut fossil fuel exposure to less than 1% of its portfolio. This case study highlights how RBF – an institution founded by oil wealth – overcame resistance from its investment committee to transition its endowment from oil to clean energy. 

 

 

In 2020, the David Rockefeller Fund announced its decision to pursue a goal of net zero greenhouse gas emissions by 2050 across its endowment. Since then, it has released interim targets intended to take meaningful steps along the path to achieving this goal, and plans to update these targets once every five years. 

 

 

Wallace Global Fund (WGF) began the process of converting to a fully activated mission investing portfolio in 2009. It began with withdrawing from fossil fuel investments and as of 2014 has been fully divested from all fossil fuel companies. In addition to providing grants, the foundation's investments are now 100% mission aligned, 100% free from fossil fuels, and 15% invested in climate solutions. Also, 10% of the Fund’s $158.2 million endowment is directed to high impact investments related to energy access and energy justice, community regeneration, and women’s rights and empowerment. WGF is also actively involved in the Divest-Invest movement, a coalition of foundations committed to leveraging their assets to support climate solutions.