Learning by Doing: Lessons from WRI’s Sustainable Investing Journey

Sustainable investing is the new black: essential, ubiquitous and a subject of forward-looking discussion. But this is no passing fashion. What was once a niche investment approach is becoming mainstream, and WRI is learning the nitty-gritty of it through its own endowment journey.

World Resources Institute (WRI) is fortunate to have a $40 million endowment that provides a modest, consistent source of annual unrestricted funding for our efforts to move society to live in ways that protect Earth’s environment and its capacity to provide for the needs and aspirations of current and future generations. But for most of our 36-year history, we invested those funds with limited consideration of factors beyond maximizing financial return. This all changed in 2014 when the WRI board committed to align our investments with our vision for a sustainable future. Since then, we have set out to systematically integrate sustainability across our entire endowment portfolio as part of our long-term investment strategy.

While the initial impetus was a desire to make our investments conform with our mission, another factor soon shaped our course: the business case for sustainability.

WRI had long recognized that sustainability has a material impact on business profitability and that companies that actively manage their sustainability performance are best positioned to survive — and thrive — in a resource-constrained world. This understanding shaped the allocation of our own assets.

The business case for sustainability has informed a substantial shift in how we manage our endowment capital. Our performance results thus far—close to our benchmark, but with lower risk—indicate that it has been a prudent shift. In the words of David Blood, a sustainable investing pioneer who joined WRI’s board in 2016, “Sustainable investing is not only the right thing to do, but it is actually a smarter investment approach.”

“Many global institutions have talked about full alignment between their investments and sustainability over the decades, but few have done so. The fact that WRI set out to accomplish this, and has made considerable progress, is a landmark for itself and others,” notes WRI board member Afsaneh Beschloss.

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