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Investing for climate: The Russell Family Foundation’s approach to investment

We, at The Russell Family Foundation, are committed to creating sustained positive impacts, reflecting a multi-generational dedication to fostering positive change in society. Our focus on using our resources for a thriving, equitable and sustainable Earth represents a natural extension of these long-standing principles. Through our investment portfolio, we work to achieve cumulative returns while upholding our mission-driven and climate-oriented objectives.

Following our commitment to the UN-convened Net Zero Asset Owner Alliance (NZAOA), our investment strategy shifted focus to earning investment returns to support grantmaking and operations, creating a low-carbon future to minimize climate risks, and prioritizing diversity, equity, inclusion and access across all asset classes. We are committed to advancing equitable climate solutions at every level of our work, including through the Catalytic Climate Finance Program (CCF), through which we share learnings from our journey toward our ambitious 2030 net-zero investment portfolio goal.

So, how does our investment approach make a real-world difference for a sustainable future?

At the heart of our investment strategy lies a clear and compelling mission to invest in people and places, leveraging capital to address the climate crisis and foster environmental resilience. With the goal of material reductions in greenhouse gas emissions, we are committing to invest in two thematic areas: decarbonization technologies and nature-based solutions.

A net-zero future, which includes reducing greenhouse gas emissions consistent with a maximum global temperature rise of 1.5°C, requires the scaling of finance in both innovative technologies as well as the planet’s natural resources.

We invest in decarbonization technologies that eliminate emissions across four out of the five key emitting sectors: energy and power, industry, transportation, and the built environment. For example, for the built environment, this includes investing in the efficient manufacture of raw materials, novel forms of fabrication and construction, and the improvement of operations. One example of this is our investment in Rose Companies, one of the leading owners, developers and operators of green affordable and mixed-income communities in the US.

Our nature-based solutions thematic area complements this by leveraging nature’s inherent ability to sequester carbon, while also encompassing the fifth key global emitting sector, food and agriculture. Investments on this front include real assets such as forestry, regenerative agriculture and improvements in farming practices, as well as nature-based carbon credits that remove carbon from the atmosphere. Examples of the companies we invest in here are EFM, Organically Grown and the Timberland Investment Group.

The readiness of many decarbonization technologies and nature-based solutions allows us to invest at several different investment stages and asset classes. Our four asset categories – stability, diversified, growth, and aspirational – all carry distinct functions within the overall portfolio and help us maximize impact and financial returns while upholding our values and mission.

The stability, diversified, and growth categories work to create short- and long-term financial viability within the portfolio, while the aspirational category carries significantly more risk, but also creates the opportunity to generate more ambitious mission-aligned impact. These aspirational investments allow us to advance newer, developing climate solutions, while other asset categories help maintain stability within the portfolio.

The importance of our aspirational asset category

The aspirational portion of the portfolio focuses primarily on riskier but highly mission-aligned investments. Part of this is through catalytic investments that carry significant potential to foster positive impacts and third-party investment that would otherwise not happen. And part of this is through scaling funds and investments to organizations, products, or programs to facilitate a meaningful increase in their reach and potential impact. For example, one of our catalytic investments is in Carbon Direct, a leader in helping companies worldwide to reduce, eliminate, and monitor their carbon emissions, including in hard-to-abate sectors such as cement, steel, chemicals, and heavy industry.

These investments result in social and environmental impact by providing capital to new, emerging or underfunded climate solutions; by offering innovative businesses the necessary funding to reduce emissions by increasing efficiency or updating emissions-intensive processes; or by mobilizing much-needed support to get nature-based projects off the ground, which can generate cumulative impact outcomes on ecosystems, biodiversity, and socioeconomic health.

Seizing the moment

For us, the opportunity lies in the time value of carbon. By investing early in climate solutions, we are not only investing in the future by helping to reduce emissions sooner and prevent more severe longer term damage, but we also give ourselves a greater opportunity to generate financial returns by doing so. Early action is also more cost effective for everyone, and helps ensure that future generations can enjoy a more stable and sustainable Earth. We employ benchmarks that help us understand risks within the total portfolio, allowing us to make meaningful climate investments that maximize both impact and returns and that drive sustainable outcomes across our portfolio and activities.

Through our investment actions, we uphold our steadfast commitment to driving positive change through strategic investment. As others navigate how to advance climate action now, we hope to offer our own learnings and insights into the transformative power of investing for climate. There is no time to lose.

You can read our latest investment policy statement here.