McKnight to use $ 3 billion endowment to fight climate change

A few days before the United Nations climate change conference, the McKnight Foundation announced Monday that it wants to have a bigger impact on climate change by making full use of its $ 3 billion endowment.

The private foundation has pledged to “achieve zero net greenhouse gas emissions” from its $ 3 billion endowment by 2050 at the latest.

The Minneapolis-based foundation, founded in 1953 by 3M executive William McKnight and his wife, Maude, has been a major funder in the fight against global warming. But this latest endowment pledge elevates McKnight’s role in the climate change arena.

In a statement, the foundation said it already has $ 500 million “committed to public and private impact investments that provide the ideas, technology, software and services to decarbonize the economy.” But McKnight executives explained that they concluded their large endowment gave them the opportunity to make a bigger impact.

McKnight President Tonya Allen said the foundation chose to take deliberate action, due to “the scale of the climate crisis.” She called on other foundations to join McKnight in its investment pledge.

“We have seen how aggressive, market-rate investments in climate solutions have spurred innovation, increased our endowment and allowed us to increase our granting,” said Ted Staryk, senior board member. McKnight Board of Directors, who chairs the McKnight Mission Investment Committee. “This is the experience that will guide us on the path to net zero. “

Beyond goal setting to achieve his ultimate goal, McKnight plans to take two strategic steps.

He characterized one of these stages as investing in solutions. The foundation said it will continue to capitalize on investments benefiting from the climate transition and seek opportunities to boost climate risk management and greenhouse gas reduction through existing conventional investments.

The other major milestone is labeled as engaging counterparts. The foundation described this strategy through three types of engagement:

  • Work with investment advisors to understand each fund manager’s greenhouse gas emissions.
  • Cooperate with asset owners and experts to identify carbon accounting data and options to reliably assess endowment emissions.
  • Work with public companies, in which McKnight owns shares, to ensure they set meaningful greenhouse gas reduction targets and move towards profitable strategies.

McKnight’s announcement comes ahead of the United Nations climate change summit which begins on October 31 in Glasgow.

It also comes as members of Congress try to reach agreement on a major spending bill. President Biden and the Main Democrats are advocating for climate change provisions in this bill.

United States Senator from Minnesota, Tina Smith, a Democrat, is the main sponsor of a clean electricity program. Smith advocated for a clean energy standard. This would force utility providers to incorporate more clean energy over time. Smith also promotes subsidies and tax incentives to accelerate the shift to clean energy.

As US Senator Joe Manchin, a Democrat from West Virginia, opposes Smith’s plan, she said The New York Times that the Build Back Better bill must include strong climate elements to gain support for the legislation.

The current battles in Congress illustrate the difficulty of reaching consensus on climate change strategy and solutions. However, several companies and nonprofits are advancing on this topic, as many scientists argue that the world’s population is running out of time to slow climate change and reduce its adverse effects.

The Business Roundtable, which represents big companies such as 3M, Best Buy and Land O’Lakes, says “businesses should lead by example” on climate change. He further argues that the United States should “take a more comprehensive, coordinated and market-based approach to reducing emissions.”

The roundtable notes that progress has been made in reducing greenhouse gas emissions, but said that “the existing patchwork of federal and state regulations, tax incentives, subsidies and other policies is ineffective. “.

As companies reduce their carbon footprint, companies innovative in deploying climate change solutions are becoming increasingly attractive to many consumers and investors.

McKnight has adopted this trend in its approach to investing.

“With investors rushing into climate solutions, the size and number of opportunities will grow rapidly, and McKnight will continue to be at the forefront of the opportunity set,” said Roger Sit, member of the McKnight Board of Directors and Chairman of the Foundation’s Investment Committee. “We are convinced that we can achieve net zero with positive impacts on the planet and our portfolio. “

Elizabeth McGeveran, McKnight’s chief investment officer, said: “The science is clear about the economy we need to create to thrive, and every dollar in endowment offers immediate and powerful opportunities to jointly advance a low-carbon future.

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