Strategies For Investing In The Wallace Global Fund

The Wallace Global Fund is a private foundation that supports people-powered movements working towards democracy, human rights, and a healthy planet. The fund was created in honour of Henry A. Wallace, the 33rd Vice President of the United States, who was a progressive leader and champion of equality. The fund's investment strategy is focused on driving social and environmental change, with a commitment to divesting from fossil fuels and investing in climate solutions. With a dedicated investment approach, the fund has consistently achieved strong financial returns, allowing for increased grant-making to support its mission. If you are interested in investing in the Wallace Global Fund, you can learn more about their investment strategy, grant-making process, and the movements they support through their official website.

The Fund's investment approach

The Wallace Global Fund is committed to driving social and environmental change by aligning its investments with its values and mission. The fund's approach is centred around four key areas: democracy, the environment, corporate accountability, and women's rights.

The fund employs a rigorous investment strategy that prioritises Environmental, Social, and Governance (ESG) standards. This involves applying "negative screens" to avoid investing in companies with operations that do not align with their mission, such as fossil fuel companies, gold mining companies, and private prison companies. Instead, they employ "positive screens" to actively invest in companies with strong ESG practices, such as those with a commitment to energy efficiency and waste reduction. This approach ensures that their investments are mission-aligned, fossil-free, and focused on advancing sustainability and human rights.

The Wallace Global Fund also prioritises impact investing, dedicating a minimum of 5% of its portfolio to high-impact investments in areas like energy access, energy justice, community regeneration, and gender and racial justice. They partner with communities, providing impact capital for innovative economic projects, and seek fair returns while prioritising the needs of the communities they serve.

Additionally, the fund engages in asset activism and shareholder advocacy to drive ESG alignment within publicly traded companies. They require their asset managers to vote their proxies on key issues and partner with organisations to advance corporate campaigns and promote diversity, equity, and inclusion (DEI) policies.

By integrating grants, investments, networks, and advocacy, the Wallace Global Fund strives to create transformative social and environmental change while delivering excellent returns.

Environmental, Social and Governance (ESG) criteria

The Wallace Global Fund is a major private foundation that funds left-of-center activities and movements with a global or national scope. The fund is committed to supporting people-powered movements that advance democracy, protect human rights, and fight for a healthy planet. This includes supporting nonprofit organizations and social movements that are global or national in scope, or can leverage a local scope to achieve a broader national or global impact.

The fund's investment strategy is focused on driving transformative social and environmental change. All investments are 100% mission-aligned, 100% free from fossil fuels, 100% integrated with Environmental, Social and Governance (ESG) criteria, and over 20% invested in climate solutions. The fund applies ESG criteria to its investment decisions by employing "negative screens" and avoiding investing in companies with operations that do not align with or harm their mission. For example, they exclude all fossil fuel companies, gold mining companies, and companies that specialize in building or operating private prisons. They also employ "positive screens" by intentionally investing in companies with policies and practices that meet their list of positive ESG attributes or are "best in class" in their sector. The fund evaluates companies based on their commitment to energy efficiency, waste reduction, and the promotion of industry standards around sustainability issues.

The fund is committed to tracking the gender, racial, climate, and economic justice impacts of its investments. They support high-impact investments focused on energy access and justice, community regeneration, and gender and racial justice. The fund seeks fair returns and prioritizes partnering with communities that design projects and define their desired impacts. By setting a standard of a minimum of 5% of their portfolio for transformative community-driven impact investments, the fund can accept fair returns and modified risks while still generating high financial performance.

Through shareholder advocacy and engagement processes, the fund drives ESG alignment within publicly traded companies. They require their asset managers to vote their proxies on key issues and partner with organizations engaged in shareholder advocacy to advance corporate campaigns. Shareholder advocacy is a powerful tool for pushing for corporate diversity, equity, and inclusion (DEI) policies and other movement-led demands. The fund also supports the Divest-Invest movement, which calls for divestment from traditional energy sources and investment in clean energy.

High-impact investments

The Wallace Global Fund is committed to supporting high-impact investments that drive transformative social and environmental change. A minimum of 5% of the fund's portfolio is dedicated to these high-impact investments, with a focus on energy access and justice, community regeneration, and gender and racial justice. This commitment to impact investing is driven by the belief that the financial system can be a force for positive change, fuelling innovation, driving corporate practices, and advancing sustainability and human rights.

The fund prioritises partnering with communities to design and define projects, ensuring that the investments are community-driven and centred around human rights, social justice, and equity. This approach has resulted in strong investment results, with the fund consistently beating its benchmarks over the past decade. This success enables the fund to increase its grant-making and further drive social and environmental change.

The Wallace Global Fund's approach to high-impact investing is closely tied to its support for people-powered movements. The fund believes in the power of intersectionality and takes an integrated approach by utilising grants, investments, and advocacy to address critical issues. This includes a focus on democracy, the environment, corporate accountability, and women's rights. The fund supports non-profit organisations and social movements that operate globally, nationally, or with a local impact that can be scaled up.

The fund's high-impact investments are also closely aligned with its mission to advance climate, gender, and racial justice. The fund has been a prominent supporter of the Divest-Invest movement, fully divesting from fossil fuels and investing in climate solutions. This movement has gained significant traction, with over 1,500 institutions committing to restrict fossil fuel funding and divest almost $40 trillion in assets. The fund's environmental efforts also extend to supporting organisations like 350.org, ClientEarth, and Greenpeace USA, among others.

Additionally, the Wallace Global Fund's high-impact investments are not just limited to environmental causes. The fund has a strong commitment to advancing gender and racial justice. This includes supporting organisations like Planned Parenthood, As You Sow, and the People for the American Way Foundation. The fund also supports left-of-centre media outlets and projects, such as Mother Jones and Media Matters for America, to promote its values and drive systemic change.

Driving asset activism and shareholder advocacy

The Wallace Global Fund is committed to driving asset activism and shareholder advocacy to create environmental, social, and governance (ESG) alignment within publicly traded companies. The Fund requires all of its asset managers to vote their proxies on key issues and partners with organisations engaged in shareholder advocacy to advance corporate campaigns. This form of advocacy is a powerful tool for pushing corporate diversity, equity, and inclusion (DEI) policies and other movement-led demands.

The Fund's investment advisor, RBC Wealth Management, plays a crucial role in this process by engaging in shareholder advocacy and requiring asset managers to vote on critical issues. This ensures that the Fund's investments are not only financially sound but also aligned with its values and mission.

The Wallace Global Fund recognises the interconnectedness of social and environmental issues and believes that the financial system can either fuel injustice and inequality or drive innovation, change corporate practices, and advance sustainability and human rights. Therefore, the Fund's investments are 100% mission-aligned, completely divested from fossil fuels, and focused on climate solutions.

By driving asset activism and shareholder advocacy, the Wallace Global Fund aims to create a more equitable and sustainable world, prioritising human rights, social justice, and environmental protection. This approach has proven successful, with the Fund consistently beating financial benchmarks and delivering both positive impact and excellent returns.

Additionally, the Fund supports the Divest-Invest movement, which calls for divestment from traditional energy sources and investment in clean energy. This movement has gained significant momentum, with cities, pension funds, health care institutions, and religious institutions joining the cause. The Fund's support for this movement demonstrates its commitment to using its investments as a tool for driving progressive social change.

The Divest-Invest movement

The movement was launched in 2011, with the support of the Wallace Global Fund, as a student-led initiative to pressure universities to divest from fossil fuels. The students understood that the fossil fuel industry was the primary barrier to climate action and that divestment by major community institutions would strip these companies of their social license to operate. The Wallace Global Fund hosted early meetings of students and activists who planned many of the first campus campaigns. The movement quickly spread beyond universities, gaining support from cities, pension funds, health care institutions, and religious institutions worldwide.

In 2014, the Wallace Global Fund launched Divest-Invest Philanthropy, with 17 foundations pledging to divest from fossil fuels and invest at least 5% of their assets in climate solutions. This initiative demonstrated that investment portfolios could succeed financially while eliminating fossil fuels and scaling climate solutions. Over 200 foundations have now signed the Divest-Invest pledge, including prominent organizations such as the Rockefeller Brothers Fund, the Ford Foundation, and the John D. and Catherine T. MacArthur Foundation.

The Wallace Global Fund's support for the Divest-Invest movement aligns with its commitment to fully align its investments with its values and grant-making goals. The fund has exceeded its financial benchmarks, demonstrating that divestment from fossil fuels does not compromise performance. The fund's investment portfolio is 100% free from fossil fuels and focused on driving social and environmental change.

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