We invest in order to finance our charitable work. We use a range of sustainable investment approaches with different financial and impact goals to support our work.
The following table reflects the different approaches Esmée uses (our spectrum of capital), with more detail about each approach below.
Grant funding
Our total annual budget for grant-making is around £50m, which is spent towards our strategic aims and priorities. This includes funding organisations advocating for systemic change in the investment system as well as support to secure more money for nature's recovery.
Our Board of Trustees regularly review our funding budget - balancing the need now with the likely need in future. Our budget is linked to the value of our endowment; we spend around 4% on grants and operational costs. To account for volatility in the market, we calculate the 4% based on the performance of our investments over the previous five years.
Social investment
We have a £60m allocation for social investments, where our approach is impact-first, and financial returns are secondary. We use social investment to support our strategic aims and priorities whilst also supporting the development of the social investment market. This includes investing in new, innovative and alternative social and environmental models, such as a Land Purchase Facility and quasi equity products.
Our total social investment, since making our first investment in 1997, has now passed £100m (237 social investments). This includes 14 investments approved in 2025, totalling £14.3m – the highest amount ever approved. They include investments to support land purchases for nature using our Land Purchase Facility, as well as an investment into a match fund by Abundance Investment for Local Climate Bonds.
Impact investing
We have a £10m allocation for impact investing, which we use to test the potential to achieve market-like returns by investing into impact funds that align with our aims, and which generate a measurable impact.
In 2025, we shared how we are aligning investments to our strategy and continued our work on thematic deep dives and collaborations. We also approved two investments: Bluefront, investing in ocean health, and Octopus Affordable Housing.
Enhanced sustainability funds
5% of our investment portfolio is allocated for funds looking to achieve enhanced environmental, social and governance impact alongside a market rate return. We use it to invest in funds that wouldn't normally make it into our main investment portfolio due to their small size, focus or risk profile.
In 2025 we committed to a sustainable forestry fund which is highly aligned with the Foundation’s Our Natural World priority.
Main investment portfolio
We work with our advisors to identify funds which focus on sustainable investing and have steadily increased the proportion we would classify as best-in class managers. As well as targeting net zero carbon in the portfolio by 2040, our Trustees have now agreed a sustainable approach across the whole portfolio. And in 2023, we updated our Investment Policy Statement to better reflect the fact that we want to take sustainability considerations into account in every investment decision.
We aim to be proactive asset owners by engaging with companies on issues that are aligned with our funding priorities. We work with other foundations and investors to look for opportunities to promote corporate behaviour which is in the interests of long term shareholders and we join various collaborative investor engagement initiatives where they align with our strategic aims. For example, in 2024, we joined an initiative encouraging UK companies to pay the Living Wage.
In 2025, we increased our holding in one fund to £55m after it had started in 2019 as a £3m position in the enhanced sustainability allocation before moving to the main endowment.
Networks we're part of include the Charities Responsible Investment Network, UK Private Capital, and FAIRR Initiative.
