Switzer Foundation Divestment Update

Posted by Lissa Widoff on Thursday, August 6 2015

Fellows:

Lissa Widoff
Almost a year ago, the Switzer Foundation joined Divest-Invest Philanthropy, the foundation and endowment side of the broader fossil fuel divestment movement.  The aim is to exit investments in fossil fuel companies, particularly those which hold significant reserves and were identified in the report by the Carbon Tracker Inititiative called Unburnable Carbon: Are the world’s financial markets carrying a carbon bubble?.  This group and others have identified the top 200 companies that hold the largest fossil fuel reserves on their balance sheets. The principle of the divestment movement is that if these fossil fuel reserves are exploited, we will most certainly exceed carbon emissions that would allow a habitable planet.  Therefore, as investors who believe in the risks and reality of climate change, we must align our investing with our mission and divest from the most egregious carbon emitters and instead invest in positive clean energy technologies and energy efficiencies for the future.
 
When we began the process, we learned that since we had already been shifting to more sustainable investment alternatives in our portfolio, we only had 2% of our portfolio in the identified companies. The challenge was that these percentages were spread throughout our portfolio. We have therefore been working with our investment advisors, Federal Street Advisors in Boston, to analyze each asset class to find the best alternative. As a relatively small foundation, we must remain prudent and assure the long-term viability of our endowment, and at the same time we are facing market challenges in a global financial environment that is less than stable. 
 
There are limited prospects for strong financial returns no matter what we choose, and the flat budgets of our grant programs reflect this. On the program side, we have been investing more deeply in each new Fellow with training and networking opportunities while making these same opportunities available to alumni. The future of the Foundation will depend, as much as on our endowment, on our most important asset of all – the network of Switzer Fellows. 
 
We’ll report on progress with our divestment strategy and hope to be fossil fuel-free by spring. A just cause for celebration for our 30th anniversary!

Additional Resources

Sea Change: Dirty-fuel divestment a rising moral choice, Portland Press Herald article from April 19, 2015

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