Presbyterian Foundation Supports Green Energy with Investments
February 27, 2018 by Erin Dunigan
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. Since 2015, the board of trustees of the Presbyterian Foundation has sought a positive approach to addressing these concerns. During the past three years, the Foundation and the trustees have worked together to seek positive investments in clean energy that also provide the returns needed to continue the Foundation’s legacy of supporting general Presbyterian missions. This mission continues as the Presbyterian Church (U.S.A.) heads toward another General Assembly in 2018.
“We started talking with our trustees and asking, ‘What are some positive actions that we can take to bring about change on the consumption end?’” said Anita Clemons, Vice President, Managing Director of Investments for the Presbyterian Foundation. “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.”
The one-percent change
Along with other actions taken in response, the Foundation’s board of trustees committed that at least one percent of the Foundation’s permanent endowment fund holdings will be invested in companies working on climate change solutions and engaged our Outsourced Chief Investment Officer (OCIO) to help identify these investments.
“We told the OCIO we wanted to have clean energy investments in our portfolio,” Clemons said. But not just any clean energy investments.
“Our endowment fund provides funding for mission all over the world, ranging from churches and schools to poverty programs to food pantries,” Clemons said. “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 financially solid.
The first two investments
After much research, the OCIO proposed two initial investments, both with good cash flow and that are also ‘doing good.’ The first is LL Funds LLC in Philadelphia, which finances residential clean energy projects. The second is True Green Capital Management LLC (TGC) in Westport, Connecticut, which finances installation and management of commercial solar projects.
LL Funds helps individuals use PACE (Property Assessed Clean Energy) financing providing loans to upgrade residential spaces to be more energy efficient.
TGC financed projects have already converted major retailing space into clean energy by installing commercial grade solar power generation in more than nine states across the U.S.
“We hope that the General Assembly will continue to be concerned about climate change,” Clemons said. “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 one percent committed by the General Assembly in 2018. The one percent allocation would represent approximately $6.5 million. Based on the size of the commitments with LL Funds and TGC, the Foundation expects to invest with two to three more clean energy managers soon.
“We must invest prudently, which is why we are not rushing to put the entire amount in one investment,” Clemons said. “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. For more information about our investment practices, visit our web site, www.presbyterianfoundation.org.