On Monday, a whole page ad appeared in the International New York Times, calling on the world’s philanthropic Trusts and Foundations to start getting their act together on climate change. This is what it said:

“Aghast that the Earth is heading for 4 to 6 degrees Celsius of global warming, given current policies on the burning of coal, oil and gas;

Terrified that we will lose our ability to feed ourselves, run out of potable water, increase the scope for war, and cause the very fabric of civilisation to crush as a consequence of the climate change that global overheating will bring about;

Devastated that our governments have not succeeded yet in slowing, much less stopping, the flow of greenhouse gases into our thin atmosphere, in the full knowledge of these risks, despite a quarter century of trying;

Aware that the UN Climate Summit in Paris in December 2015 may be the last chance to agree a treaty capable of saving civilisation;

Believing that the world’s philanthropic foundations, given the scale of their endowments, hold the power to trigger a survival reflex in society, so greatly helping those negotiating the climate treaty;

Recognizing that all the good works of philanthropy, in all their varied forms, will be devalued or even destroyed in a world en route to 6 degrees of global warming or more, and that endowments that could have saved the day will end up effectively as stranded assets;

We, 160 winners of the world’s environmental prizes, call on foundations and philanthropists everywhere to deploy their endowments urgently in the effort to save civilisation.”

This trenchant statement was signed by 160 award-winning environmentalists, marshalled by the indefatigable Jeremy Leggett of Solarcentury / SolarAid fame. I was one of them.

Why bother, you might ask? Isn’t the story about responding to climate change down to governments, business and civil society – the usual governance triangle? The answer to which, from my perspective, is that there’s a huge amount that the world’s big Trusts and Foundations could be doing. Unfortunately, the vast majority of those Trusts and Foundations, particularly in the USA, are failing to fulfil their philanthropic obligations by continuing to ignore the growing impact of accelerating climate change.

That may sound a bit harsh. After all, many of them are operating in areas that have absolutely nothing to do with climate change. So let’s just invent one fictional US foundation to demonstrate what I mean.

The ‘Save the World (Go On: You Know You Want To!) Foundation’ has an endowment of $250m, and an excellent fundraising team. Every year, it gives away about £30m to help really poor communities in Africa.

Its investment strategy is simple: maximise investments returns in such a way as to ensure that they have more money to give away every year. As a result, more than 30% of its investments are still in fossil fuel companies and various energy-intensive sectors. They use no ethical screens; that would get in the way of maximised returns.

The investment team in the Save the World Foundation never talk to the programme team (why would they?), despite apparently sharing the same overarching mission and values.

A $250m fund is neither here nor there in terms of the scale of today’s capital markets. But in a very small, highly symbolic way, the Save the World Foundation is helping to prop up the fossil fuel industries. Which, in the same very small but symbolic way, exacerbates the threat of runaway climate change and slows the transition to the kind of safe, secure energy future we need.
And here’s the rub: African countries will be amongst the worst affected by the consequences of accelerating climate change – from droughts, floods, rising sea levels and profound impacts on agriculture.

In other words, the Save the World Foundation investment strategy puts at risk the lives of the very same poor communities in Africa that its philanthropic grants are working so hard to protect.

The ‘Save the World (Go On: You Know You Want To!) Foundation’ doesn’t exist. But there are hundreds, if not thousands, of Trusts and Foundations who conduct their business in exactly this way, doggedly hanging on to the idea that their investments are one thing, and the grants they give another, completely separate thing. No connection between the two. I know it sounds completely unbelievable, but that’s their reality.

Hence the urgent appeal through the pages of the International New York Times to Trusts and Foundations “to deploy their endowments urgently in the effort to save civilisation”.

There are basically three specific elements to that demand:

  1. Invest In zero‐or‐low‐carbon climate-solution companies and projects, as debt and/or equity, ideally relaxing normal interest rates, hurdle rates and exit timeframes;
  2. Sell any fossil fuel investments, and reinvest in clean energy companies, or as a minimum stay invested in fossil‐fuel companies and campaign as shareholders for those companies to switch spending away from exploration and development of new reserves;
  3. Accelerate the development of zero‐or‐low‐carbon markets, by giving grants – on a scale they have never before – to the multiplicity of projects that can make a difference across the greenhouse‐gas emissions spectrum.

A very powerful example has already been set by the Divest-Invest coalition. This launched in January 2014, announcing that 17 foundations with assets of nearly $2bn had committed to pull their investments out of fossil fuels and back clean energy instead.

If that $2bn could be grown into $20bn, and then into $200bn, we’d really begin to see some movement, especially on the divestment front. And given that almost all investment professionals seem all but incapable of thinking for themselves, preferring to be part of the herd, maybe that would be enough to get a real stampede going.