NEW YORK (October 18, 2021) – Today, the Ford Foundation announced a plan to end further investment in fossil fuels and seek out additional climate-friendly investments. The foundation’s investment strategy furthers Ford’s commitment to better align investments with the foundation’s core mission and values, and optimize resources in the best interest of grantees and the global community.
Ford Foundation President Darren Walker issued the following statement:
“Although just 0.3% of the Ford Foundation’s endowment is directly invested in fossil fuel companies, we take our duties as fiduciaries seriously and we’re mindful that if we put restrictions on our investments, we may forsake some amount of return for future generations. At the same time, however, the Ford Foundation’s trustees, leadership team, and I recognize a risk graver than forsaken value: There is no perpetuity without a planet.
We face profound challenges on an existential scale. Fires and floods are worsening—and on top of it all, the distortion of our market system, and the inequality it’s produced, have overloaded the burden of these disasters onto the backs of the poor, the marginalized, and the vulnerable. I believe that the intersecting crises of climate change and inequality threaten to make an outmoded vision of perpetuity, at best, obsolete—and, at worst, destructive.”
(Read the full statement here)
Ford’s investment strategy is two-fold: protect the planet by ending investment of further assets in the endowment into fossil fuels and seek opportunities to invest in alternative and renewable energy in the future. Going forward, the foundation has pledged to invest in funds that address the threat of climate change, and support the transition to a green economy.
The move builds on the Foundation’s ongoing efforts to optimize its resources in the best interest of grantees, communities, and society at large—in a balanced, but ambitious way. In 2017, the Foundation announced a $1 billion commitment to mission-related investments (MRIs), which are proving the potential of capital markets to deliver both a financial and social return. In 2020, during the worst of the COVID-19 pandemic, the Foundation financed a $1 billion social bond, effectively doubling payout rate and injecting a capital booster to grantees during a period of uncertainty and peril.
Over the past five years, Ford has deployed over $3.7 billion to organizations around the world fighting for equality and justice, and more than $311 million of those funds went to grantees on the frontlines of the fight for environmental justice. To learn more about the foundation’s work to combat climate change, click here.
The full Ford Foundation Policy Statement on Fossil Fuel Investments is below.
For some time, the Ford Foundation has been reducing its exposure to fossil fuels. Today, we have only 0.3% of our endowment in direct investments in companies that explore for or develop reserves of fossil fuels. We have not made any such investments since 2013, and we do not intend to make such investments in the future. Given our view of the merits of such investments on risk/return grounds, and our responsibility as fiduciaries to make long-term investment decisions that support our mission, we do not believe such investments belong in our endowment.
The Foundation has legacy investments as a limited partner in a number of private equity funds with holdings in the fossil fuel industry. These indirect investments constitute less than three percent of the endowment, a number that will continue to decline over time. The Foundation has not made any new commitments to these limited partnerships since 2017, and we have no intention to do so going forward. These legacy investments are in runoff mode and will end as these partnerships are liquidated.
At the same time, the Foundation is actively looking at opportunities in alternative and renewable energy funds that support the needed transition to a green economy.