Introducing the
Sustainable Cities and Communities Foundation (SCCF)
The Sustainable Cities and Communities Foundation (SCCF) – formerly the Sustainable Human Settlements Foundation – was established in Jersey with the Jersey Financial Services Commission (JFSC) as a registered Foundation (FD403) on the 15th of February 2021 in accordance with a Letter of Intent (LOI) executed by the Founder and Guardian, Blenheim Capital Partners Limited (BCPL), and UN Habitat (UNH) signed on 20 November 2020.
SCCF (and its Founder – BCPL) has since its formation been through a comprehensive and forensic vetting process by the UN Controller’s Office as well as the UN Office of Legal Affairs in addition to UN Habitat Legal Affairs. Approvals were granted accordingly and the Foundation on the 2nd of March 2021 executed a Memorandum of Understanding (MOU) with UN Habitat.
SCCF has since presented to the UN Deputy Secretary General, the UN Donor Group in Geneva; presented and participated in three World Urban Forums (2020, 2022 and 2024), five UNH Executive Board (EB) meetings as well as attend the Second UN Habitat Assembly in Nairobi all the while further developing and refining issues around the structuring of funds, governance, oversight and reporting as requested and required by the EB.
On the 30th of November 2023, the UN Habitat Executive Board authorised the Executive Director to enter into a Contribution Agreement with the Foundation and UNH. The formal agreement was signed that same evening. The agreement provides for an initial term of ten years. As a part of the authorisation granted, the Foundation was requested to consider a name change so as not to confuse with the pre-existing UN Habitat Human Settlements Foundation. In accordance with that request, the Foundation name change has been effected to the Sustainable Cities and Communities Foundation or SCCF. New email addresses and a changeover to a new website are currently underway. In the interim the pre-existing SHSF email address continues to operate.
The governments of Germany, France, Portugal, Kenya, Nigeria, Cameroon, the African Group, USA, Argentina, Brazil and the European Union all expressed their support for the Foundation as an accelerator in support of UNH and its scalability model for non-earmarked funding.
During this process the Foundation has engaged in discussions with a leading international banking group to act as banker for SCCF and donor investor funds. In addition, a leading investment house with over £35 billion in funds under management will be appointed as a first investment manager of the funds under management on behalf of SCCF and its Donor Investors. A second fund manager will be selected so as to ensure the Foundation and its stakeholders are best served.
Both the banking group and investment fund manager having material commitments to ESG/SDG investment.
The Investment Managers will be responsible for on-going reporting and disclosure to their respective regulatory authorities as well as SCCF and Donor Investors. SCCF will in turn provide Donor Investors and UNH with copies of all reports.
Advisory Board: –
As a part of the agreement with UN Habitat, Member States will appoint amongst themselves five (5) countries to sit on the Advisory Board of SCCF along with four (4) Independent Members.
SCCF has a nascent Advisory Board (AB). Founding independent members being:
- Sir Nigel Knowles, CEO DWF LLP (former Chairman and Senior Partner DLA Piper; Lord Sheriff of Greater London and Board Member of the Prince’s Trust (two terms)).
- Mr. Richard Gray, A well know British banker. Currently Vice Chairman of Zeus Capital, INVESCORE and three international banks.
- To Be Invited.
- To Be Invited.
The Advisory Board to be Co-Chaired by a Member state and an Independent Member. Sub-Committees providing oversight for Compliance/Legal/Governance; Finance/Investments; Audit and; Educational Outreach, will be established with the ability to appoint experts who are not members of the Advisory Board. Semi-annual reporting has been agreed.
Certification: –
SCCF will within two years be ISO certified and all reporting will comply with GRI Standards.
The Fund: –
The intent is to raise initially a Fund 1 for the sum of USD$1 billion to be invested in what is classified as a ‘Cautious Balanced’ investment portfolio (on a risk scale a 2 out of 5 where 5 is high risk and a 1 is very conservative).
SCCF fees will be a one-time charge of 3.7% of funds received from Donor Investors. The monies used to cap its fund-raising requirements and early-stage Foundation expenditure and administration as well as an early-stage donation by SCCF to UNH.
Donor Investors will commit in principle to a ten-year investment through the Foundation. Projected annual yields are currently 6% per annum post investment manager fees and adjusted for inflation.
Donor Investors may support SCCF in one of three ways:
- The first being a traditional donation (a substantial one time = ‘Fire & Forget’) where the Donor has no further involvement or direct economic benefit arising from the funds invested save recognition of the donation and subsequent annual returns as further ODA contributions by the Donor Investor. Of the forecasted 6% yield, 5.5% will be donated by SCCF to UNH for the purposes as mentioned above with 0.5% remaining with SCCF to finance its direct costs as well as its creation of an educational outreach programme in partnership with University College London (UCL) described further below.
- The second way in which a Donor Investor may participate is to donate a substantial one-time sum for investment. The Donor Investor will receive at maturity of the fund (10 years) the then value of its principal donation. The annual yields generated over the term of investment being used in a similar manner as per (1) above.
- The third way for a Donor Investor to participate is along the lines of (2) above however the Donor Investor shall receive by way of a second priority 3% of the annual yield (ie 50%) with the balance (3%) being applied 2,5% to UNH (as a first priority) and 0.5% retained by SCCF to be applied and used as described previously.
Individual acknowledgment will of course be given as well as a statement of each Donor Investor’s portion of the full 2.5% as its contribution in support of UNH for its unfunded and underfunded mandates as a whole including sustainable and affordable housing in Lesser Developed and Island States countries.
For UN Member States, such donations will be eligible for acknowledgement as Overseas Development Aid (ODA) contributions annually. An indirect way to use a financial instrument to support limited ODA budgets. For Corporations there may be tax benefits for their Donor Investments in their country of residence.
As noted above the 0.5% retained by SCCF will be used for three purposes: –
- The first being its planned Educational Outreach Programme with the University College London (UCL) to fund qualified candidates for its Master of Science in Sustainability Programme. Funding to include all tuition fees, housing costs, air travel and a bursary to cover living expenses for the one-year full time programme. Successful graduates will then go on to a SCCF paid internship for one year with UN Habitat to gain experience by way of practical learning on site in Sustainability. This will assist in helping fill existing manpower gaps at UNH as well we hope to create a ‘train the trainers’ programme in the individual’s home country. The Educational Outreach Programme will be funded by a minimum of half of the funds retained by SCCF (0.25%) out of the 0.5%. It is the hope of SCCF to ultimately provide 25-30 annual scholarships and UNH paid internships.
- SCCF will need to establish a physical office of its own staffed by a dedicated small team. We do not wish SCCF to be burdened by significant overhead and estimate a team of no more than 4 to 5 individuals required. We are aware of what many Foundations and Charities spend in administration and fund raising where a significant percentage is not spent for the intended purposes. We are budgeting 0.125% as a capped annual budget.
- Of the remaining amount retained by SCCF (0.125%) we intend for these monies to be used to build the Foundation’s reserves. This will allow the Foundation to respond to urgent requests by UNH should the need arise because of catastrophic events (e.g., a Beirut Port Explosion and the massive earthquakes in Turkey and Syria) where emergency teams from UNH can respond knowing their efforts will be paid for.
Accounting and Legal Oversight & Reporting: –
SCCF will engage one of the Big Four accounting and audit firms with monthly accounts being prepared as well as six-monthly financial accounts report to SCCF, Donor Investors, the Executive Board of UNH and the JFSC. An annual certified audit will be undertaken as well with similar distribution. Legal advice will be provided by an established international firm with a physical presence in Jersey to ensure continued local legal oversight, compliance and reporting to the JSFC, Donor Investors, UNH and its Executive Board. The chosen firm will also issue twice a year an opinion on the Foundation for similar distribution to all stakeholders.
The foundation will ensure with fund managers to establish a ‘traffic light’ system on all funds invested and managed by them. The purpose is to provide early warning of any issues with a particular investment and established protocols to resolve such.
Future Development: –
SCCF hopes to continue beyond Fund 1 and further develop for UNH additional funds to support other needs and initiatives in the future.
November 2024.
