Endowments & Foundations
At EdenTree, we are proud of the relationships we’ve built with endowments and foundations over the years, both as an investor and as part of the Benefact Group, the third largest corporate donor in the UK.
Owned by a grant-making charity, Benefact Trust, we welcome our close connection to the sector and the opportunity to learn from it. As committed sustainable investors, we also understand the delicate balance required to pursue the resilient long-term returns essential to supporting charitable activity while remaining true to the values that underpin our approach.
Our commitment to listening shapes our thought leadership. In 2026, we spoke with endowments and foundations representing more than £15bn in assets to better understand their priorities, ambitions and challenges, sharing what we heard in our report, Sustainable Investing: The Foundation Perspective.
Why invest sustainably?
Every foundation approaches sustainable investing slightly differently, guided by their mission and objectives. For some, it is about managing long-term risks and identifying opportunities; for others, it is about protecting reputation or bringing investments into closer alignment with their values. For many, it is a combination of these considerations, shaped by their own priorities, governance and ambitions.
At EdenTree, we view sustainable investing as a way to position for long-term success, identifying businesses that help address real-world challenges and create value for a broad range of stakeholders. Our conversations suggest many foundations share this perspective.
Put your capital to work
"Our endowment is one of our most powerful tools when it comes to driving our mission and creating positive change." - a foundation representative
Align investments and values
"We believe our investments should reflect the same values that underpin our grant-making." - a foundation representative
Manage long-term risk
"Sustainability is often framed as a trend. From a long-term investment perspective, it's simply risk management." - a foundation representative
Invest with intention
"Your capital is already shaping outcomes. The question is whether you're doing it on purpose." - Impact Investing Institute
Foundation Perspectives
Through our work with foundations, we find three key topics are often front of mind: engagement, risk and trade-offs. Exploring these can help foundations think more clearly about their priorities and have more informed conversations with trustees and staff.
Engagement
Cordelia Dower-Tylee, Engagement Lead at EdenTree
Engagement
Cordelia Dower-Tylee, Engagement Lead at EdenTree
Foundations have a unique understanding of the role collective action, persistence and expertise play in driving real-world change. Effective engagement is no different. Meaningful progress depends on asking the right questions, targeting efforts effectively, and recognising the value of both small actions and smaller actors.
While progress and outcomes define success, this should not be confused with quick wins as this can encourage box-ticking rather than genuine impact. As we’ve seen with our own engagement, delivering lasting impact requires patience and strong, constructive relationships with companies.
Engagement is the use of investor influence through dialogue and voting to understand risks, promote accountability, and drive positive environmental, social and governance (ESG) outcomes. For many foundations, engagement is a core component of their sustainable investing approach. When effective, engagement can lead to meaningful change and deliver real-world outcomes. It can also influence investment decisions: if a company is unwilling to engage on material issues or demonstrate progress, some investors may ultimately choose to divest.
A common concern among foundations is whether they are large enough to influence companies through engagement. Some feel they are too small to make a difference, while others question whether their investment managers have sufficient influence on their behalf. Yet growing evidence suggests that size is not the defining factor. Collective action, clear expectations, persistence and a willingness to set non-negotiable standards can all contribute to tangible outcomes. A strong market reputation can be equally important, as investment managers with recognised expertise in a particular area, such as climate change, can leverage their credibility to influence companies effectively. We have certainly found this to be the case at EdenTree.
“If you care about governance, then you should care about how the companies you’re investing in are governed.”
UK Foundation quoted in Sustainable Investing: The Foundation Perspective 2026
Risk
Tom Fitzgerald, Fund Manager at EdenTree & Investment Committee Member at GOSH Charity
Risk
Tom Fitzgerald, Fund Manager at EdenTree & Investment Committee Member at GOSH Charity
When the topic of risk arises, it often evokes a sense of unease. This is understandable, given that risk is commonly defined as ‘a chance of danger, loss, injury, or other adverse consequences’. However, simply associating risk with negative outcomes is a generalisation and misconception. Within investment markets, risk can also create opportunities for positive outcomes when it is understood and managed effectively.
In the context of sustainable investing, trustees often focus on potential risk-return trade-offs. However, they should also consider the risks of inaction. Long-term trends such as climate change, biodiversity loss and the transition to a low-carbon economy are increasingly influencing investment performance. Ignoring them may leave portfolios exposed to future challenges and missed opportunities.
A practical starting point is for trustees to agree on their appetite for return, risk and impact, and to consider how sustainability factors support their investment objectives. By discussing these priorities with their investment manager, trustees can help build resilient portfolios that remain aligned with both their long term goals and the charity’s mission.
Risk, like impact, takes many forms. While market risk is often central to investment discussions, foundations also consider reputational risk and the risks of inaction.
Investing in ways that align with organisational mission can itself be a form of risk management, with transparency and good governance playing an important role. At the same time, long-term trends such as climate change, biodiversity loss and the transition to a low-carbon economy are increasingly influencing investment decisions.
The starting point is clarity: understanding your organisation’s objectives and appetite for risk, return and impact, and taking considered risks where appropriate.
“Even if you’re not concerned about climate change, there is huge potential for reputational risk in certain areas of investment.”
UK Foundation quoted in Sustainable Investing: The Foundation Perspective 2026
Trade-offs
Carlota Esguevillas, Head of Sustainable Investment at EdenTree
Trade-offs
Carlota Esguevillas, Head of Sustainable Investment at EdenTree
We welcome the growing interest from foundations in understanding the impact of exclusions over longer timeframes. Our role is to support these conversations with transparency, evidence and analysis. While exclusions are often assumed to come at a performance cost, the reality can be more nuanced. By assessing the impact of common exclusions, such as oil, gas and coal, aerospace and defence, alcohol, and tobacco, over one, three and five years, we can help foundations better understand the trade-offs involved and make more informed decisions.
For many foundations, the question is not simply one of performance, but whether certain exposures align with their values and mission. Given the breadth of today’s investment universe, it remains possible to build diversified portfolios and pursue strong long-term returns without compromising on those principles.
Trade-offs are part of investing, just as they are in everyday life. In essence, a trade-off is a decision that balances one benefit against another. For example, travelling by train instead of flying may reduce emissions and cost less, but it usually takes longer. The same principle applies to sustainable investing. For foundations, the key is understanding those choices rather than presenting sustainable investing as straightforward. This means having candid conversations with investment managers about what is achievable, where trade-offs arise and the practical challenges of implementation.
Greater transparency can help foundations understand the perceived or real impact of decisions such as exclusions on returns, and balance long-term sustainability risks with the financial returns needed to support charitable activity.
“If there are uninsurable sectors, there will also be uninvestable ones and this could lead to stranded assets. Your [foundations’] income generation could end because of the choices you are making now.”
UK Foundation quoted in Sustainable Investing: The Foundation Perspective 2026
Supporting the sector
The power of collaboration
We know there is real value in bringing people together. Through our thought leadership and wider engagement, we convene foundations, endowments, charities, investment managers, advisers, intermediaries and the public sector to exchange ideas, challenge thinking and explore how sustainable and impact investing can better support the sector. Our partnership with the Impact Investing Institute brings further expertise and insight to these conversations. Read their guest essay in our report, Do it on Purpose: How Investors Shape the World Around Them.
Support beyond investing
As part of Benefact Group, our connection to the charity sector goes beyond investment management. Alongside our giving programme, Movement for Good, Benefact Group provides a range of free support and resources. Explore Benefact Group’s charity support, including webinars, forums, articles, guides, reports and practical resources.
Helpful resources
Wherever you are on your sustainable and impact investing journey, there are practical resources to help. The Impact Investing Institute’s Learning Hub, the Endowments with Impact programme and the Charity Investment Governance Principles Self-Assessment Tool offer guidance and tools to help organisations explore their approach and take the next step. Our team is also always happy to answer questions and share our perspective.
Discover our funds
Every endowment and foundation has different investment needs. Whether the priority is long-term growth, generating income or a combination of both, our sustainable and impact fund range offers a choice of solutions to support your objectives. Spanning equities, fixed income and green infrastructure, all investments are evaluated under The EdenTree Standard.
Funds popular with endowments and foundations include the EdenTree Sustainable Global Equity Fund and EdenTree Sustainable Managed Income Fund.
Helping trustees stay informed
Access practical resources, market updates and investment insights designed to support charities and trustee boards.
Foundation Perspectives: Sustainable Investing in Practice
Drawing on insights from 25+ UK foundations and endowments representing over £15bn in assets, this report explores how the sector is approaching sustainable and impact investing.
EdenTree Corporate Responsibility Report 2024–2025
The EdenTree Corporate Responsibility (CR) Report is now live.
EdenTree Sustainable Investment Activity Report 2025
The EdenTree Sustainable Investment Activity Report 2025 is now live.
EdenTree Stewardship Report 2025
The Stewardship Report 2025 covers our activity over 2024. This was a year shaped by considerable global uncertainty: ongoing geopolitical tensions, persistent economic headwinds and intensifying pressures on sustainability.
