Within and among the boards of charitable foundations, a range of viewpoints may exist in terms of what constitutes climate leadership and how to effect meaningful change on the path toward a net-zero-carbon economy. How funds are invested matters, write Greg Elliott and Monika Freyman – and allocating invested assets in ways that accelerate the pace of change matters most.
Philanthropic foundations can manage their investments to provide much-needed support on the most urgent issues facing the planet in a variety of ways: divestment, transition financing combined with shareholder engagement, impact/ESG investment – or even winding down and freeing up their endowments to accelerate work toward a net-zero Canada by 2050.
Canadian foundations know that responsible investing can reap both positive impacts and benchmark-beating financial returns, but it isn’t easy – knowing where to invest, measuring social outcomes, even agreeing what to call it. It’s “tough, ongoing work,” says one foundation leader.
Canada’s charitable sector has a unique opportunity to help shape the leadership practices and related discourse about sustainable and responsible investment, argue contributors Chad Park and Greg Elliott. In doing so, it can leverage the sector’s significant invested assets to help meaningfully address some of today’s most pressing challenges, they write.
The concept of generating positive benefits beyond just financial returns is particularly attractive to grantmaking foundations that steward endowments. But the president of Max Bell Foundation argues that a number of concerns about “responsible investing” make it premature to advocate that government should push charitable endowments in that direction.
