Using the power of capital to secure an enduring prosperity at home
After 25 years of investments to build social, economic, and ecological benefit across the region, Ecotrust is proud to join the Divest-Invest movement. Below is the first of a series on our approach to strategic capital.
Ecotrust is proud to support the Divest-Invest movement and our signatory partners. For over 25 years, we have put our money where our mouth is – investing our endowment in enterprises that support lively cities, functioning ecosystems, meaningful employment, and healthy, local, and diverse sources of food, water, and energy.
This is an exciting time to consider opportunities at the intersections of philanthropic and investment capital, for-profit and non-profit enterprises, and public and private institutions.
Widespread awareness of capitalism’s negative impacts is transitioning to an awareness of its potential for positive impacts. Much of the public attention remains focused on the “Divest” movement – pressuring foundations, universities and other social purpose institutions to liquidate investments in companies involved in the extraction, transport, and processing of fossil fuels. But for more and more people, divestment alone fails to resolve the conflict between their economic self-interest and their discomfort with the worst of capitalism’s social, environmental, and economic effects. The resulting portfolios, turned into products and sold as socially responsible investment (SRI) funds, are just twists on the inadequacy of conventional financial instruments in fulfilling our longing for resilience, creativity, inter-generational security, and community.
There is growing demand for investment strategies based on enterprises that actually reflect the world we want to live in, whose operations create collateral benefits instead of collateral damages. These “impact investment” funds seek to generate measurable, beneficial social and environmental outcomes alongside financial returns. The potential for this space is apparent in the mainstream financial sector’s rush to join what is already being called an emerging “asset class” –more and more firms are creating some form of impact investment opportunity– a belated affirmation of the work Ecotrust has been doing for some portion of the last 25 years. Amidst all this activity, what might the next phase of Ecotrust’s committments look like?
Instead of money looking to make more money through negative screens applied to values-aligned investments or aggregations of disparate impact investments, we are trying to use capital – along with other tools – to manifest essential transformations necessary to secure enduring prosperity here at home in the Pacific Northwest. Whether on behalf of our vision for ecological forestry supported by diverse mill infrastructure, a robust regional food system that nurtures the entire value chain from producers to consumers, or viable community-based fisheries and working waterfronts, our capital allocation strategy will be directed by deep place-based expertise and programming.
In partnership with philanthropic capital searching for accountability and solutions, and private capital searching for coherent mission-related strategies, the integration of capital sources increases strategic impact by delivering more collateral benefits as we implement opportunities emerging from Ecotrust’s core competencies restoring the lands, waters, and communities across the region. In addition, the stable returns we generate on those investments, earned while improving the wellbeing of people and place, will prove out the thesis that a natural model of development deserves to be the standard model of development.
The Divest Invest Philanthropy Pledge:
We are foundations divesting from fossil fuels and switching to clean energy investments, joining college, health, pension funds and religious endowments doing the same. Ethically, our investments shouldn’t contribute to dangerous climate change. Financially, fossil fuel stocks are over-valued as most of their reserves cannot be burned. We can get good, safe returns while helping to build a new energy system. In the next five years, we will:
- Stop any new investments in the top 200 fossil fuel companies.*
- Drop coal, oil and gas from our investment portfolio by divesting from the top 200 fossil fuel companies.
- Invest at least 5 percent of our portfolio into climate solutions defined as renewable energy, energy efficiency, clean technology and clean energy access.
* The historical standard for divestment commitments has been a pledge to divest from the top 200 public oil, gas, and coal companies as listed on the Carbon Underground.