Ginny Quick, Chief Financial Officer
The Sierra Club Foundation
Investing For a Better World: Spring 2013
The Sierra Club Foundation is a public 501(c)(3) charity whose mission is to help educate, inspire, and empower humanity to preserve the natural and human environment. We achieve this mission by raising funds for tax-exempt charitable purposes and by managing these funds so that future generations will inherit a healthy planet with wild places left to explore.
The Sierra Club Foundation does not manage its own programs, but rather provides financial support for programs that protect and restore the environment, primarily by serving as fiscal sponsor to the Sierra Club, a separate organization.
Beyond exercising the normal fiduciary oversight of its financial assets, the Foundation seeks to ensure that its investments are consistent with its environmental mission. As Foundation Board Chair Larry Keeshan has observed, “We at the Foundation are stewards of the money we receive to support our environmental mission, especially longer term investments and endowments. Part of that stewardship is an investment policy that incorporates socially responsible investing with a special focus on environmental concerns.”
Investing in companies that demonstrate corporate responsibility and sustainability values in their business practices alongside solid financial returns is strategic, more consistent with the activism of the Sierra Club’s campaigns, better aligned with the Foundation’s environmental mission, and a powerful tool for change. Importantly, asInvestment Committee Chair Tim Ryan has stated, “Mission-aligned investing is affirming that environmentally friendly practices are also financially smart and good investments.It moves us closer to 100 % support for our mission and enhances our reputation.”
Trillium was hired by the Foundation during our transition to a screened portfolio. In addition to its track record on performance and having organizational values that are aligned with the Foundation’s, Trillium gave us the opportunity to invest in separate accounts for the first time and to use our investments as a tool to achieve our mission in yet another important way: shareholder engagement. The Sierra Club has unmatched capacity for direct environmental activism through grassroots resources located in every part of the country. The Foundation can support and complement those efforts by working with Trillium on shareholder engagement with companies in the Trillium portfolios, something the Foundation does not have the staffing capacity to do on its own.
This past summer, the Foundation’s Board took an important first step by signing on to a letter Trillium had drafted in support of the EPA’s environmental assessment of the Pebble Mine project in the Bristol Bay, Alaska, watershed, which threatens an important ecosystem in that part of the country. More recently, the Foundation Board voted to have Trillium represent the Foundation on a shareholder proposal to Spectra Energy on fugitive methane emissions from natural gas drilling and approved signing a letter encouraging Bank of America to discontinue financing the coal-mining industry. These direct attempts to influence a company’s behavior through stock ownership give the Foundation yet another avenue to advance its environmental protection strategy.
Shareholder activism enables the Foundation to push companies to focus on the importance of environmentally sound practices and the positive actions that can result if companies are willing to take steps to protect the environment, fight climate change, and create a clean, renewable energy future. Investment Committee Chair Tim Ryan has noted, “Shareholder engagement puts public and financial pressure on companies to stop assisting an environmentally bad practice. It’s another tool to expose sources of environmental degradation and help educate upper management.”
Another Board member, Molly Ross, has found this approach especially productive:I have used proxy voting for many years to push companies to do the right thing, and have witnessed companies change position as a direct result of shareholder advocacy, so I consider that a great tool for change, as well.”
Conversations with Trillium continue as we explore where the Foundation’s portfolio holdings, Trillium’s priorities, and the work the Sierra Club is doing provide opportunities to advocate together on specific issues. As we move forward, it is clear that Trillium has the expertise to advise the Foundation as we navigate the nuances of often-complex strategies.
It is exciting work for the Foundation to have taken on.
This article was published in the Spring 2013 issue of Trillium Asset Management’s newsletter: Investing For a Better World.