(7 minute read)
Published: 21 January 2025
Written by: Alice Thornton, Head of Research and Impact
This year, we are proud to share that John Ellerman Foundation has been a signatory of the Funder Commitment on Climate Change (FCoCC) for a full 5 years, since it was launched in 2019.
The FCoCC is an important collective statement that, as independent funders, we recognise that the climate emergency is a serious risk to the pursuit of our charitable aims. We agree that there is a special responsibility on foundations like ours, whose assets are held for the public good, to use our resources and independence to rise to the challenge.
Everyone who signs up to the FCoCC makes the following six commitments:
1. To educate and learn;
2. To commit resources;
3. To integrate the commitment in all that we do;
4. To steward our investments for a post-carbon future;
5. To decarbonise our operations; and
6. To report on progress.
There are now 136 signatories to the FCoCC. The urgency with which we must collectively act grows greater every year. Whilst we have been firmly committed to responding to the climate crisis for some time – it is central to our charitable aim to advance wellbeing for people, society and the natural world – this year, we have stepped up our commitment by making some significant shifts. It is worth noting that our approach to responding to the climate crisis is also shaped by our thinking and work on responding to the nature crisis.
Our progress in 2024: Playing our part in tackling the causes and impacts of the climate emergency
As a funder with the natural world at the heart of our charitable purpose, responding to the climate emergency is well integrated into our overall approach and has been for many years. It sits at the heart of our 2022-25 strategy, our funding guidelines and our Investment Policy. Our ability to do this relies on us seeking out opportunities to educate our staff and Trustees and progress our organisational learning on this topic each year. It also follows that for many years we have been thoughtful about the environmental impact of our operations and have taken steps to minimise that impact. Initiatives like the FCoCC enable us to be part of a collective endeavour, transparently shared, and we feel that this the most effective way for organisations to do their part in rising to the challenge.
Given this context, two of the commitments stand out as particularly important for us to honour. The first is to commit resources. As an environmental funder, we must continue to provide essential funding for work to address the causes and impacts of the climate crisis, and do so in a way that is effective. The second is to steward our investments for a post-carbon future, ensuring that the way our endowment is invested to generate returns for our grantmaking does not contradict our charitable aim to protect the natural world. This year we have made significant steps forward in advancing both of these commitments.
Committing more resources to tackling the climate emergency
In 2024 we have increased both the number and the combined value of grants made to combat the causes and effects of climate change, compared to the previous year. Since November 2023, when we last reported on our progress, we have provided £1.4m further funding to 13 organisations to deliver climate emergency related work. This means that our live grants portfolio now comprises 26 multi-year grants worth a total of £2.6m to tackle this issue. As an open and responsive funder, we are pleased that we have been in a position to play a small part in responding to the increasing demand from civil society to resource this important work.
Alongside distributing our resources as effectively as we can, we also know that we must do all we can to maximise the impact of our limited funds. This is why we continue to champion the need to support environmental work in the UK Overseas Territories (UKOTs), which are arguably the UK’s most important environmental treasures. Scattered across the globe, they are home to every major habitat type on earth, including rainforest, tundra, desert, coral reef, and icefield. These areas house at least 94% of the UK’s unique wildlife species and comprise the fifth-largest marine estate on the planet. We believe that the UKOTs represent an unparalleled opportunity for environmental philanthropy: relatively modest investments yield substantial conservation benefits in these biodiversity-rich regions, which are bearing the brunt of the nature and climate crises.
This year, we committed £50k to run a UKOTs learning series designed to attract more environmental funders, including individual and family donors, to fund environmental work in the UKOTs. The learning series has been delivered by the Environmental Funders Network and culminated in an invitation to join us in committing to a new round of the UKOTs Fund from next year. The UKOTs Fund is a funder collaboration that we have run two rounds of in 2021 and 2022 that has distributed circa £1.8m to-date. We worked with EFN to assess the impact of the UKOTs Fund so far, resulting in the publication of The UK Overseas Territories Fund: An unparalleled opportunity for environmental philanthropy. The key findings from the report include:
- The Fund has catalysed urgent conservation activities such as invasive species eradication, habitat restoration and the protection of both marine and terrestrial ecosystems.
- Specific achievements include the creation of coral biobanks in the Turks and Caicos Islands, the creation and expansion of national parks in the Falkland Islands and Anguilla, and groundbreaking research on whale sharks in St Helena.
- Funding has also bolstered the capacity of local environmental organisations, enabling them to deliver more impactful and sustained conservation efforts, and leverage further funding.
- Grant-holders highlighted the ease of interacting with the UKOTs Fund and its flexibility, particularly in providing much-needed core cost funding, rarely available from other sources.
We will continue to champion environmental work in the UKOTs and hope to play our part in attracting more philanthropic funding to resource this important cause in the coming year.
Stewarding our investments for a post-carbon future
In addition to resourcing climate emergency-related work through our grantmaking, we have also committed to invest our endowment in a way that does not misalign with our charitable aim to advance the wellbeing of people, society and the natural world. To that end, this year our Finance & Investment Committee approved further updates to our Investment Policy, which is reviewed annually and governs how our endowment is invested. The main changes relate to our approach to exclusions, which we have extended to include the following:
- Indirect investments into tobacco (we have excluded direct investments in tobacco companies for some time, but we will now exclude investments held indirectly as well, for example holdings in pooled funds).
- Thermal coal (a type of coal that is burned to generate electricity).
- Tar sands (a type of sand or sediment containing bitumen, which can be processed into crude oil).
- New primary market capital for fossil fuel production and infrastructure (this means, for example, we will not buy new shares issued by oil and gas companies).
We have chosen to make these exclusions because we believe these activities can never be compatible with our charitable aim. In other words, no amount of engagement with companies who derive income from tobacco, thermal coal or tar sands will help to advance wellbeing for people, society and the natural world; and providing new investment to fossil fuel production and infrastructure is fundamentally misaligned with the aims of the Paris Agreement, which seeks to keep temperature rises well below 2°C above pre-industrial levels.
Other changes to our Investment Policy this year include:
- Emphasising our belief in stewardship to produce sustainable financial, environmental and societal benefits. This means using our influence to ensure that our investments generate not just a positive financial return, but social and environmental benefits as well.
- Re-emphasising our ongoing commitment to address the systemic impact of the climate and nature crises. We believe that as an investor, we have a duty to consider how the income that funds our grantmaking is generated and the implications of those activities for the natural world.
We are in active conversations with each of our fund managers to ensure compliance with our updated Investment Policy, and have dedicated more staff resource to this work than has been possible in previous years. This includes ongoing work with one of our fund managers, Fulcrum Asset Management, to engage with underlying fund managers in the fund of funds we are invested in. So far this work has resulted in one underlying fund manager agreeing to no longer provide primary market investment in fossil fuel expansion, which is a clear example of the real-world impact of this change to our Investment Policy.
We continue to actively participate in the Charities Responsible Investment Network, responding to requests for feedback and support on its various workstreams. This has included some joint work with other members to improve the responsible investing approaches of two fund managers and we have actively contributed to discussions and thinking on banks and their financing of fossil fuels, universal ownership and applying responsible investment principles to private equity.
We are also taking steps forward in implementing our commitment to social investing, by putting in place the processes we need to make our first social investment which we aim to do next year. To support us in this process we continue to be active members of the Social Impact Investors Group (SIIG), convened by the Association of Charitable Foundations (ACF); the Environmental Impact Investing Group (EIIG) convened by the Environmental Funders Network; as well as the Finance Investment and Resources Management group, convened by ACF. We believe that the updates we have made to our Investment Policy this year, and continuing to take part in these collective initiatives, are important examples of our commitment to steward our investments for a post-carbon future.
Rising to the climate challenge in the long term
We believe in the importance of sector-wide initiatives like the FCoCC to galvanise collective action, share progress and hold each other accountable to rising to the challenge that the climate crisis is already bringing. Both within our organisation and as part of this funder collective, we remain as committed as ever to do our part to respond to the climate crisis.