Illuminating Sustainable Investment at Canadian Foundations

Abstract

Foundations play an important role in transitioning to a low-carbon economy. As mission-driven organizations, foundations can be leaders in social finance given their focus on environmental, social, and governance (ESG) impact. At best, the majority of foundation assets could be fully activated to achieve peak impact, and at worst, they could be negating the foundation’s beneficial impacts. This paper argues that annual reporting on ESG and an increase in the percentage of investments toward a greener economy will assist Canadian foundations in becoming more climate friendly. I employ semi-structured interviews with senior staff and board members at Canadian foundations that are leaders in ESG and impact investing and use institutional and stakeholder theory to explain the driving forces behind increased ESG investing at foundations.