Investing in Climate Change Solutions
For the Presbyterian Church (U.S.A.) climate change is not just a conversation to be had, but a pressing issue to be addressed. As stewards of God’s creation, how can we be both responsible and proactive in our attempts to stem the rising tides?
The Presbyterian Church is not alone in such concerns — hundreds of denominations, private endowments and institutional investors are studying how their investments can best be leveraged and mitigate the negative effects of climate change. The Board of Trustees of the Presbyterian Foundation, in their June 2015 meeting, sought a positive approach to addressing these concerns.
“We started talking with the Board and asking, ‘What are some positive actions we can take that actually bring about change on the consumption end?’ shared Anita Clemons, Vice President, Managing Director of Investments.
“We may criticize Exxon and Chevron for profiting from burning fossil fuels. However, we continue to drive our cars and fly in planes which changes nothing,” she continued.
As a response to this, the Foundation board of trustees committed that at least 1 percent of the Foundation’s permanent endowment fund holdings will be invested in companies working on climate change solutions and engaged Cambridge Associates to help identify these investments.
“We told them we wanted to have clean energy investments in our portfolio,” continued Clemons. But not just any clean energy investments.
“Our endowment fund provides funding for mission all over the world, ranging from schools to poverty programs to food pantries,” said Clemons. “Given the track record of clean energy investing to date, we didn’t want to invest in anything that would have any negative impact on this mission work.” Because of these factors the Foundation sought investments that are both ‘clean’ and ‘solid.’
After much research Cambridge came up with the first two investments − good investments, with good cash flows, that are also ‘doing good.’ The first is LL Capital which finances residential clean energy projects. The second is True Green which installs and manages commercial solar projects.
LL Capital allows for individuals to use PACE (Property Assessed Clean Energy) Financing — providing loans to upgrade residential spaces to be more energy efficient.
True Green has already converted major retailing space into clean energy by installing commercial grade solar at various locations across the United States.
“We hope that the General Assembly will continue to be concerned about climate change,” said Clemons. “We also hope that the GA will look at the efforts we have made trying to be good stewards, making responsible investments that are also good to the environment.”
The Foundation hopes to have the entire 1 percent allocated by the next General Assembly in 2018. The 1 percent allocation would represent approximately $6.5 million. Based on the size of the commitments with LL Capital and True Green, the Foundation expects to invest with two to three more clean energy managers in the near future.
“We must invest prudently, which is why we are not rushing to put the entire amount in one investment,” explained Clemons. “Our responsibility is to maintain fiduciary excellence while being faithful to the social witness principals of the PC(USA).”
The Presbyterian Foundation believes that its investments can both do good and do well. Through practices of impact investing, corporate engagement, and use of positive and negative screens, the Foundation seeks to manage all aspects of the funds entrusted to us in accordance with God’s call for faithful stewardship. Care for God’s creation is one element of this stewardship. This story is one in a series about ways the Foundation is using its investments to work for greater change in the care and keeping of the earth we inhabit.