Post Paris talks on climate, many of us are awaiting federal and provincial policy announcements on climate action before taking our own next steps on climate justice. Yet, we can no longer afford to wait. Archbishop Emeritus Desmond Tutu’s said in his plea for an end to the fossil fuel era: “Divest from fossil fuels and invest in a clean energy future, benefiting the world’s majority. It is no longer acceptable for any of us to seek to profit from systems and industries that threaten our values. Move your money out of the problem and into solutions.”
The Toronto-based grant-making organization, Catherine Donnelly Foundation (CDF) has made the decision to divest some of its assets from the worst global companies with the largest coal, oil and gas reserves, as listed in the Carbon Tracker Initiative’s “Unburnable Carbon” report.
Rather, the Foundation is seeking impact-investing opportunities— investments made into companies that generate social and environmental benefits alongside a financial return.
In April 2014, the CDF purchased $100,000 worth of solar bonds through SolarShare, Canada’s leading renewable energy co-operative. Early in 2015, the foundation made a second investment $100,000 in ZooShare, North America’s first zoo-based biogas plant. Recently the foundation’s board agreed to make two new investments, to be announced shortly, that will triple the value of the foundation’s impact investments. One of these new investments will also be in the renewable energy field.
As grant makers, the foundation (established in 2003) has Christian roots. It is the legacy of The Sisters of Service, with a vision of affirming “the inherent dignity of every person and the sacredness of creation.”
With such a vision, one is absolutely called upon to think really hard about the incongruence of having assets tied to companies that are implicated in the destruction of the planet.
“In our minds, climate change is a profoundly moral, social and existential crisis,” says Desmond Wilson, Director of Finance at the Foundation. Wilson doesn’t mince words: “The track we’re on, with increasing greenhouse gases (GHG) emissions, is that if we don’t make big changes, economically and in lifestyle, we are threatening the life systems that support us.”
According to Wilson, for Christians sustaining conflict and harm to creation is of deep concern: “We have to address the injustices associated with climate change—how it affects the ones with the least resources to adapt—and the ones who are the least responsible for it,” Wilson emphasizes.
What are the implications of divesting?
Wilson says that within the Foundation, making a moral and ethical choice about divesting wasn’t difficult at all. Dealing with the financial consequences of divesting from the energy sector, which is a big part of our economy, is more of a challenge. “In making that decision, the board had to carefully consider their fiduciary duties, a primary responsibility they carry when it comes to the stewardship of the investment assets,” Wilson explains.
An assessment of financial risk was clearly essential: “Here we had to assess the implications of selling the coal, oil and gas stocks that we owned, and generally consider the evidence, historic and predictive, around investing in this industry,” Wilson says. The case had to be made that divestment was consistent with the Foundation’s responsible investment policy.
The foundation, which is focused on the areas of affordable housing, adult education and environment, will endeavour to commit up to 10% of its portfolio directly to further its charitable purposes: “We have to earn some revenue but we are trying to find investments where we can earn returns that are in line with, and contribute to, our mission.”
As social investors, Wilson stresses that this is a long-term perspective. “There is more and more evidence testifying that taking into account non financial, environmental, social and governance considerations, need not hurt returns and can even enhance them,” he says.
Going forward the foundation is looking to network and share resources and is interested in emerging opportunities for reinvesting sustainably.