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Efforts to solve the climate crisis are unleashing a wave of innovation, entrepreneurialism and economic opportunity in the private sector. With growing uncertainty about the long term viability of fossil fuels and the decreasing cost of clean energy, Fortune 500 companies, institutional investors, money managers and others are taking notice. Even the former head of Shell is saying that fossil fuel divestment is a reasonable response to the industry’s lack of leadership on the issue. But divestment alone is not enough.
The White House agrees, which is why it is demonstrating leadership with its Clean Energy Investment Summit, where commitments totaling $4 billion from the private sector and through executive actions were announced. The summit serves as a forum for foundations and other private sector investors, including, according to the official White House fact sheet, “hundreds of organizations as diverse as the University of California, Goldman Sachs, and The Sierra Club Foundation” to share their ideas and insights on scaling investment in innovative technologies to reduce carbon pollution. For our part, we announced an additional investment of $4 million from our endowment.
When people think of the work of The Sierra Club Foundation, they usually think of our funding for grassroots advocacy efforts to move the planet beyond fossil fuels and towards a clean energy future. But there’s another – and equally important – side to our fight to protect the planet: our investments. While Sierra Club organizers are working hard to shut down the next coal-fired power plant or securing more aspirational renewable energy standards, the Foundation is teaming up with scores of other investors to research, identify, and invest in clean energy and other technologies to bring critical climate solutions to scale.
Tackling the climate crisis can only be achieved by transitioning the global economy to a clean energy future that protects workers, our communities and our air and water. By investing in clean energy, The Sierra Club Foundation is putting our money where our mouth is. Equally important, we are confident that these long term investments will hit our return objectives to fund our activities long into the future. Coal stocks are plummeting and clean energy is expanding rapidly. Given the inherent risk of long term investments in fossil fuels in a world where the G7 nations just committed to complete de-carbonization over the course of the century, it only makes sense to invest in what’s taking their place. Although the science demands a faster timeline that what the G7 proposed, the future is still pretty certain.
The Sierra Club Foundation has a history of using our endowment to support the move to a clean energy future. Before this summit, our combined operating and endowment funds of approximately $60 million included $6 million of investments in renewable energy, efficiency, clean energy technologies and green bonds; however, we recognized that those commitments were not enough. With this new commitment (approximately 20% of our endowment), we are specifically targeting innovative technologies and clean energy investments that offer potential solutions to accelerate the transition to 100% clean energy.
The White House and The Sierra Club Foundation agree that to tackle the climate crisis we need to transition the global economy to a clean energy future, and make fossil fuels something relegated to the history books. As a grantmaker, we are engaging every avenue to create the right policy conditions for this shift to occur. As an investor, we are redoubling our commitment to funding the technological innovations that will protect the planet AND improve our bottom line. The old, tired argument over environmental protection vs. economic growth is just that… old and tired. Investments, deployed responsibly, can deliver both an environmental and economic punch.