The Guardian has learnt that the newly appointed climate envoy from the United Kingdom will continue to serve on the board of a nonprofit whose founders have assets in fossil fuels and have donated millions of pounds to the Labour party.

The UK's special representative on climate change, Rachel Kyte, was appointed this week as the former head of the World Bank's climate division. She is a member of the Quadrature Climate Foundation's advisory board on climate change, which was established by the founders of the investment firm Quadrature Capital.

Last year, Quadrature Capital included fossil fuel investments in its portfolio and donated £4 million to the Labour party. The opposition energy minister, Joy Morrissey, wrote to the government this week to enquire as to whether the donation had any influence on the selection or if it was taken into consideration as a possible conflict of interest at the time of nomination.After controversy surrounded her appointment, some senior figures in the UK and global green movements rallied to Kyte, who is widely respected around the world for her decades of work on climate and development issues.

Kyte will retain her role on the charity board, the Guardian has learned, which operates independently of the investment company. She had no role in Quadrature Capital’s investments or decisions on political donations.

She will also retain her post as professor of practice in climate policy at the Blavatnik school of government at Oxford University. She may keep a small number of other external engagements.

Christiana Figueres, a co-founder of the Global Optimism thinktank and a former UN climate chief who oversaw the Paris agreement in 2015, said: “David Lammy [the foreign secretary] could not have chosen a more well-equipped person to help the UK government in their new commitments to mobilising climate finance, which has been the bane of climate negotiations for years, if not decades. She has devoted most of her life to the challenge of facilitating universal access to clean energy and will bring that experience to an exceedingly difficult mandate she has received.”

Laurence Tubiana, the French former diplomat who helped negotiate the Paris agreement and now leads the European Climate Foundation, which has also received funding from the Quadrature Climate Foundation, said: “Rachel Kyte is supremely well qualified to be a UK climate envoy,. She is a warrior on the global climate pitch, and David Lammy is lucky to be able to call on her. Her high-level expertise, especially on climate finance, would be valuable for the UK and the global climate community, especially in light of [the forthcoming climate summit] Cop29.”

Kyte’s role as special representative on climate at the Foreign, Commonwealth and Development Office (FCDO), answering to Lammy and the energy secretary, Ed Miliband, will be a paid position requiring engagement in high-level global diplomacy, forging alliances with developed and developing countries to tackle the climate crisis.

According to the FCDO, Kyte’s appointment underwent full due diligence under standard Cabinet Office procedures for direct ministerial appointments, and her external engagements will be reviewed on a case-by-case basis throughout her tenure to ensure no conflicts of interest.

Quadrature Climate Foundation was set up by Greg Skinner and Suneil Setiya, financiers who also founded Quadrature Capital, an investment and technology company. The Guardian reported this year that the foundation, run by the billionaire hedge fund bosses whose investment fund has invested in fossil fuel companies, had given millions of pounds in grants to several well-known climate campaign groups.

Jess Ayers, the chief executive of Quadrature Climate Foundation, said: “Quadrature Climate Foundation is a charitable foundation and operates in line with its charitable purposes and independently from Quadrature Capital Limited. QCF’s focus is on funding and supporting science-led solutions to climate change. Since its inception, QCF has committed over £700m to promote sustainable development and advance climate solutions globally. QCF is politically neutral and does not support any political party.

"QCF is creating an advisory board to offer impartial criticism and collaborative ideas to strengthen its influence in the industry. The advisory board is not able to make decisions. Because of her exceptional leadership in the climate field—which includes her high positions at the World Bank, UN agencies, and third-sector organizations—Rachel was appointed as co-chair of this board in December 2023. Rachel's appointment to this important job in the UK government is additional recognition of her competence.