Besides our commitment to advancing impact investing and sustainable finance, we also want to take a pioneering role when it comes to investing our own endowment. We have achieved this goal earlier than expected through a strategic realignment. Today, nearly our entire portfolio is invested along clearly defined sustainability criteria as well as in impact investments. To ensure not only financial return but also the social and ecological alignment of the Foundation’s endowment, we are guided by both ESG (environmental, social, governmental) and SRI (socially responsible investment) standards. Moreover, we will increase our commitment to impact investments in the future.
In 2018, we grew our impact investment activity through the Eberhard von Kuenheim Fund (EKF), a 20-million-euro vehicle designed to annually invest parts of the endowment in accordance with social and environmental impact criteria. Besides achieving a positive financial return, we thus make a direct, measurable contribution to achieving the United Nations’ Sustainable Development Goals. Moreover, through our activities, we help build and professionalize the international impact investment ecosystem.
In 2019, the EKF has subscribed to new funds whose investment strategy clearly expresses this goal: A fund invests in businesses that seek to maintain their long-term independence and purpose through steward ownership. Through these investments, the BMW Foundation commits to bold alternatives within the existing financial and economic system. Another one of our investments provides targeted support to impact-oriented entrepreneurship in one of the fastest-growing startup hotspots in Europe. Through our investment, we have been able to mobilize additional private-sector capital and significantly grow our network in Europe, especially in Portugal.
By actively managing our portfolio, we are increasingly able to use the Foundation’s endowment as a strategic instrument: Our investments and investment activities have further strengthened our excellent international networks with leading stakeholders and helped build connections that are important for the Foundation’s work. Through our active engagement, Foundation members are increasingly represented on supervisory and shareholder boards, which makes it possible for us to gain direct insights into the strategies of leading sustainability investors and to co-create important trends.
The re-alignment towards an impact-oriented model in combination with a positive equity market environment in 2019 resulted in a considerable overall portfolio return. In our view, the strategic alignment has proven successful and is to be continued in the future.