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From climate strategy to solutions: a journey to transform the way we invest

In a world where commitments to help limit the climate crisis are growing, we know that, as a nimble foundation long dedicated to people and communities, The Russell Family Foundation has an important role to play in helping turn ideas into action.

What drives us, you might ask? 

Our passion for real-world impact and playing our part in improving the health of the planet for all. And, of course, this can be seen across our investment portfolio that is almost fully values-aligned through its support of people and places to advance environmental sustainability. Tackling the climate crisis was a natural step for us as disruptions to food production, human health, infrastructure and ecosystems deepen, disproportionately affecting those most vulnerable.

Two years ago, our Catalytic Climate Finance Program (CCF) was born. Our staff and board of directors were, and continue to be, aligned and committed: the climate crisis deserves our full attention.  That year, we announced our own commitment to achieving net zero by 2030, including reducing greenhouse gas emissions across our entire portfolio consistent with limiting global warming to below 1.5°C. And, we signed the UN-convened Net Zero Asset Owner Alliance, a member-led initiative of institutional investors committed to transforming their investment portfolios to net zero GHG emissions by 2050.

CCF was designed for the internal and external advancement of our ambitious 2030 climate goal, and will serve as a platform for future growth and learning. Although, as one foundation, it is not our intention to create a roadmap, we do intend to share lessons learned along our journey toward climate-aligned investing to help accelerate this for others.

Together, and with focused efforts, foundations and other asset owners can help bridge the investment gap for climate. And it’s clear from our work so far that many, particularly those with flexible asset pools, can move quickly and take advantage of many philanthropic tools to reach net zero.

What’s in store for this year?

Transparency. Building trust through transparency and integrity is at our core. As we set our interim targets for 2025 and work to implement our CCF strategy, we are committed to full transparency – for the successes and the challenges.

To achieve net zero, we have committed to further reduce our portfolio’s footprint by 30 percent by 2025. This is no small feat, since our portfolio was already nearly 80 percent more carbon efficient than the MSCI benchmark when we started this process in 2022. Part of the challenge is the difficulty in analyzing the emissions of private assets, so we are continuing to work with Carbon Direct to better understand these using proxy data. Private assets account for around 40 percent of our investment portfolio. It might be the case that some of our existing investments, for example, in sustainable forestry and clean energy, will help our portfolio’s footprint, but we need to understand the data better.

This year, we must also determine how we plan to engage our top 20 holdings in backing targets and net-zero commitments. Finally, we want to shift an additional 15 percent of our assets toward decarbonization technologies and nature-based solutions aligned with the goals of our new investment policy statement: returns, diversity, equity, and inclusion, and a lower-carbon investment portfolio.

Sharing our learnings. Our identity is deeply tied to the idea of empowering others by sharing our decades-long investment expertise.

A priority for the year ahead is to document our process in a way that is useful and accessible to other foundations and family offices, which will be done through an annual report and a range of other communications.

We must use every tool in our toolbox to meet our climate commitments. In our experience, philanthropy has tended to lead with grant making, particularly for climate, where grant allocations are directed toward driving solutions. We are flipping the script with CCF, leading with our investments and then supporting that with grant making. Providing our community with more information about this approach will be central to our efforts this year.

We are also developing our communications strategy to help ensure that our resources and ideas reach the right audiences in the right ways.

Collaboration. Our own journey started with learning from our peers, so it’s natural that collaboration will continue to be a key focus for CCF, in particular, exploring opportunities to promote shared storytelling.

We began this last year with net-zero convenings in New York and San Francisco. The more we share our different experiences, including the trickier challenges, the more we can lower the barrier of entry for others. The perceived complexity of achieving net-zero portfolios is a major barrier at the moment. So, what we learn along the way, we will share so that others can learn the same lessons and accelerate their own journey. There is no one-size-fits-all framework, and the urgency of the climate crisis means there is no time to wait for the perfect plan.

Maximizing Real World Impact. We are committed to stepping back and truly scrutinizing how we can deliver the most real-world impact. This is about real work.

Working toward net zero is an important component of this effort, but it isn’t the only lever we can pull to deliver impact. We will explore this more deeply as part of CCF this year.

Foundations may have relatively smaller pools of capital compared to other asset owners who are pledging net zero, but they can often move more quickly and lean in more easily to their decisions and commitments. They also have a unique role in the investment community with the flexibility to use a variety of philanthropic tools such as grants, investments, communication, and convening. These tools are particularly valuable in aligning mission-oriented pools of capital to a common goal of net zero.

So, as we continue to invest in climate, empower climate solutions, collaborate with others, and promote equitable action, we invite those already embarking on or considering similar journeys to reach out. The stage is set for impactful finance, and climate is our north star.