How our charitable foundation uses our endowment to do good, not just our grants

29 Apr 2015 Voices

The Tellus Mater Foundation is using the voting power of its investment portfolio to push for action on climate change. Director Kelly Clark talks about how it is important for charities to align their endowment with their mission.

Director, Kelly Clark, on why her Tellus Mater Foundation is using the next three years of grant funding to advocate for a global two degree climate change target.

During the summer of 2014 Tellus Mater became one of the first foundations in the UK to sign up to Divest/Invest - an climate change movement which commits to divesting from companies which use fossil fuels, and invest in green technology.

We continue to be active members of the coalition committed to investing in line with a two degree world.

The Divest/Invest movement has been tremendously successful at raising awareness, creating a narrative and encouraging impactful action around the risks of  ‘stranded assets’, or a devaluation that will negatively affect the shareholders of these companies.

As a climate change foundation dedicated to using capital markets as an important lever for environmental protection, we strongly believe in aligning our endowment with our mission. In other words, we believe that charities must not just use the profits of their investment to do good, but must do the same with their portfolios.

We also feel that active engagement with fossil fuel companies is a critically important element of an effective global divest/invest strategy. As an active owner, we are able to influence business practices through voting, engagement and participation in company AGMs. By harnessing the power of this ownership we are able to use our seat at the proverbial table when important issues related to business planning are being considered, particularly decisions related to capital expenditure (CAPEX) on new reserve exploration and drilling activities.

The research of Carbon Tracker clearly shows that many fossil fuel companies are considering expensive new projects that will never be profitable for investors if we are to stay within stated carbon budgets. This has the potential to create ‘stranded assets’ .

We believe capital markets have a key role to play in the fight against climate change. Accurate and well-substantiated data suggests that over the medium to long-term there will be tremendous erosion of value, leading to significant economic loss if we exhaust our carbon budgets. This argument is both true and universally relevant for all investors--regardless of their political affiliation.

Over and above the ethical and the scientific reasons why we must limit the amount of fossil fuels coming out of the ground, this research makes a strong financial argument that there is significant value at risk to ALL portfolios if we don’t drive the entire economy towards the adoption of two degree business plans.

We feel that this is such an important issue that we have dedicated all of our grant funding for the next three years to systemic interventions that can drive capital markets towards the adoption of two degree investment portfolios.



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