The McKnight Foundation has committed to bringing its $3 billion endowment to net-zero by 2050. The announcement puts the foundation in company of a growing number of institutions that are working to reduce the environmental impact of their financial assets – including recently the Wellcome Trust, the Ford Foundation, and Harvard University, among others.
McKnight is a leading funder of climate solutions in the American Midwest. The announcement comes just before the UN Climate Change Conference in Glasgow.
‘The magnitude of the climate crisis requires that we take bold and deliberate action. Foundations sit on over a trillion dollars of potential climate solutions, and we invite others to join us’, said Tonya Allen, McKnight Foundation President.
Private foundations in the United States are required by law to spend at least five per cent of their endowment each year. While foundations typically use grant dollars to support climate solutions, the remaining 95 per cent of an endowment often goes untapped, ‘a missed opportunity to invest in change’, according to the McKnight Foundation.
In McKnight’s case, over 40 per cent of its $3 billion endowment has some mission alignment, and impact investments are uncapped, with $500 million committed to public and private impact investments that provide the ideas, technology, software, and services to decarbonize the economy.
Net-zero is a comprehensive strategy to immediately reduce greenhouse gas emissions across the entire investment portfolio – including the fossil fuel sector – while also making new investments to build a carbon-free economy. This approach requires scouring every corner of the endowment for emissions, discontinuing investments in high-emitters, such as any remaining fossil fuel investments, working with fund managers to decarbonize their holdings, and regularly communicating progress.