The majority of companies managing investments for charities and philanthropic foundations still use philanthropic endowments to make extensive investments in environmental destruction and tobacco, according to a new report. 

Asset managers responsible for more than $80 trillion of assets – including those of charity and family endowments – are investing in fossil fuels, nuclear weapons and tobacco, and are failing to meet biodiversity standards, says the report by the responsible investment charity Share Action.

The charity warns that asset managers based in the USA have turned away from social and environmental standards. And that potential changes to EU regulation could see standards diminishing in Europe too.

It comes as a small but growing number of charities and foundations look to move to more mission-aligned investments with their endowment money.

Share Action says its latest report shows that only four out of 76 of the world’s biggest asset managers have sufficiently strong fossil fuel policies.

In addition, just six asset managers are unlikely to profit from the production of nuclear weapons, and, only a quarter restrict investment in tobacco across most of their funds, states the Point of No Returns report. 

The charity also found that more than half of asset managers failed to meet any of Share Action’s biodiversity standards. 

Socially Irresponsible Investment

Each year the charity ranks the largest players in the market, who together control over $80 trillion assets, including public pension money.

Those who failed to take steps to protect people and planet in their investment practises included the four largest asset managers in the world – BlackRock, Fidelity Investments, State Street Global Advisors and Vanguard.

The combined assets under management for the four is more than $28 trillion.

Many asset managers take the approach of having a portion of impact investment funds, which they say contribute to social and environmental good, but simultaneously invest significant amounts in companies which cause environmental and social destruction.

Meanwhile charities and family foundations increasingly want to see more of their philanthropic endowments going towards social and environmental good.

Read the full article about philanthropic endowments funding environmental harm by Claudia Cahalane at Alliance Magazine.