Climate Change and Trust funders – part one
With a growing energy crisis, record greenhouse gas concentrations, and increasing extreme weather events, next month’s COP27 seeks to build on and deliver action on what is increasingly being seen as a climate emergency. This two-part blog looks at the rising prominence of Climate Change Action in the UK funding sector and what it means for charities.
Momentum has been building for a while. In November 2019, 14 UK-based funders made a public commitment – The Funder Commitment on Climate Change – to tackle climate change and called on other funders to join. They pledged to educate and learn; commit resources; integrate climate change action across their existing programme; steward their investments; and decarbonize their operations. There are now about 100 signatories, including a few community foundations.
So, what does the Funder Commitment on Climate Change mean:
- Funders will be improving their assessment of applicants’ environmental credentials and aspirations;
- They are making fundamental adaptations in their own workings to enable them to react to the climate change;
- They are thinking through all their funding strands – heritage, arts, social action – with mitigation of environmental harms in mind;
- Their own investment strategies are altering;
- There is a high level of commitment to an ongoing process.
Investment strategies
To underline the speed of developments, and directly relating to the point about altering investment strategies, earlier in 2022 a landmark judgement was made on trustee investment duties. The case, which was brought by The Ashden Trust and Mark Leonard Trusts against the Charity Commission concerned the obligations of trustees to maximise return on investment. Their objective was to adopt “new investment policies which align investments with the Paris Climate Agreement”. They won.
So, what does this mean for grant applicants? The corollary, as the IoF has recently been suggesting, is that applicants should, “if circumstances allow or if their cause is environmentally sensitive”, look at how the grant maker derives its income and examines the ethics of its investments. The funders’ environmental credentials should inform a charity’s decision about the aptness of the funder for the cause.
Charities will need to remain aware of and indeed may need to be cautious of approaching funders with an unacceptable environmental impact. This may take time to develop, but we have seen similar distancing take place on other issues, such as the Opiod crisis (with the V&A finally breaking links with the Sackler Family).
Part two of this two-part blog on Climate Change and Trust funders will focus on environmental funding.
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