After 20-plus years championing our mission of contributing to a sustainable and peaceful world for people, places and communities, The Russell Family Foundation (TRFF) spent 2022 reflecting on our purpose and future. Through an in-depth process involving our staff and board of directors, it became clear that the climate crisis deserves our full attention. We can’t turn away from the effects of climate change — rising sea levels, extreme weather, forest fires, disease and more are threatening our natural environment and quality of life. This urgency and passion to do more to offset our environmental impact is what set TRFF to begin looking at what a net zero commitment would mean and if it could be possible for our foundation.
Can we do it?
Only a handful of other foundations have made a net zero commitment, and there is no playbook on how to do it. Similarly, there are varying frameworks for measuring net zero, so we had to align on what this meant and looked like for TRFF. We explored frameworks such as the Science-Based Targets Initiative and Net Zero Asset Owners Alliance. We spent time meeting with others in investment management and philanthropy, like McKnight Foundation, David Rockefeller Fund, Terra Alpha and Capricorn Investment Group, to learn about their journeys in committing to net zero. As we have completed our emission baseline, we are concluding that not only would our operations and investment portfolio need to align, but we will also need to consider how to incorporate our grantmaking into a net zero commitment. Grantmaking accounts for less than 5% of our total emissions, and we will focus our near-term attention on our investment portfolio, which makes up approximately 90% of our annual emissions.
After many months of due diligence and learning, we were comfortable proceeding and announced our formal commitment to net zero in October 2022. This meant that TRFF would aim to reduce greenhouse gas emissions across our entire investment portfolio and operations consistent with a maximum global temperature rise of 1.5 degrees Celsius. As a foundation focused on the environment for nearly 25 years, having divested from fossil fuels and achieved other milestones along the way, this has been an exciting and natural next step. With this new future, we have also committed to prioritizing diversity, equity, inclusion and access across TRFF’s organization, grant and investment portfolios.
Getting started
First, we needed to categorize and define this work as part of TRFF’s programming. We designed the Catalytic Climate Finance Program for the internal and external advancement of our ambitious goal, while also integrating the net zero strategy into our revised Investment Policy Statement. In addition to moving our investment portfolio in alignment with a net zero commitment, we will also use grant capital in areas where investment capital may not be an appropriate tool. The grant portfolio will be designed to complement the investment portfolio decarbonization, support a just transition and engage with the field to shape the carbon markets and encourage others to actively address the climate crisis.
As part of our announcement in October, we signed on to the U.N.-convened Net Zero Asset Owners Alliance (NZAOA), a member-led initiative of institutional investors committed to transitioning their investment portfolios to net zero greenhouse gas emissions by 2050. The NZAOA provides us with a structure and resources for mapping to net zero and helps illustrate our level of commitment and eagerness to work with and learn from others.
Additionally, we made a $500,000 investment in Carbon Direct, which supports growth-stage companies in the U.S. and Europe focused on reducing, removing and monitoring their carbon emissions. Since then, we’ve also engaged Carbon Direct to perform an emission baseline to put a concrete figure on our operational and grantmaking emissions and peer review our investment advisor’s portfolio baseline. As we review the results of this baseline, we will confidently understand our total annual emissions. This figure will be our starting point to set interim targets for reduction between now and our 2030 goal. We will continue to measure and report on our progress toward set targets.
Learning together
The first phase of this work continues to truly center learning as much as we can. Earlier this year, TRFF partnered with Confluence Philanthropy to create two Net Zero Intensive convenings in San Francisco and New York. Peer foundations, along with their investment advisors, gathered to learn about what it takes to make a net zero commitment with authenticity and rigor. Through these convenings, it’s become evident that there is no perfect framework to follow, and the most important feature of any framework is transparency. To transition successfully, we and other foundations must follow a framework that suits our unique needs.
Working with our financial advisors, AlTi, we are examining how to shift our investment portfolio to meet our net zero goals and keep diversity, equity, inclusion and access priorities integrated into our transitions.
On the grantmaking side, we have further narrowed our focus areas and launched a new program, Food for Climate Solutions. Food for Climate Solutions prioritizes support for organizations that are addressing farm stewardship, increasing the sustainability of farm businesses, strengthening the regional food system, and more.
Next, we will set targets
After months of research, networking and learning, we plan to set interim targets at our upcoming 2023 Investment Audit Committee and board meetings, publish a baseline and track progress for formal reporting next year.
This is just the start of our work toward net zero by 2030, and we hope sharing our steps and key learnings will help others to demystify the process and follow a similar commitment.
Kathleen Simpson is CEO of The Russell Family Foundation.
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