Invest Like a Climate Activist

Summary: Fossil Fuels Out of Investments

Description

Do your financial investments align with your values? Are you investing in the corporations that are contributing to climate change? If you are striving to wean your daily life off of fossil fuels, consider weaning your investments off of them too.

How can you better align your investments with your values?  The search platform Fossil Free Funds offers a 'Fossil Free Action Tool Kit' that can help get you started. The website also has detailed information on specific funds that invest in the fossil fuel industry and those that invest in clean energy.  350.org, with Trillium Investments and Green Century,  has produced a guide to removing fossil fuels from your portfolio.  As You Sow, a non-profit organization that promotes environmental and social corporate responsibility, offers free online tools to find out what companies are embedded in your mutual funds and which funds are aligned with your values. Switch to funds that support the industries that have specific environmental, social, and governance issues you want to support.

Deep Dive

How does sustainably focused investing work?  Look for investment companies that have adopted Environmental, Social, and Governance (ESG) or Socially Responsible investing. They will offer funds that weigh more than financial gain as a selection criteria. Among their offerings, select funds that invest in companies with higher environmental focus than industry peers, such as renewable energy and sustainable materials. A fund  might also invest in a mining company that’s inherently risky environmentally but ranks high on managing the environmental impacts of its products and services. 

What can you do beyond buying mutual funds and stocks?  Shareholder advocacy has shown to be successful in shaping the strategies of funds. See As You Sow for more information. 

Influence your 401k investments. If your company 401k does not have fossil fuel free investment options or ESG funds, use employee interest to advocate for them. Use the tools at www.fossilfreefunds.org.

Steps to Take

1. Use the online tools and information available through Fossil Free Funds and As You Sow to learn about sustainable investing and to find out which funds are aligned with your values and which ones are not. 

2. Switch to funds that support the industries that have specific environmental, social, and governance issues you want to support.

3. Weigh the risks of the investments with your risk tolerance. Remember that all financial investments come with a degree of risk.

4. A financial advisor who specializes in sustainable investing may be able to help. 

5. If your company does not offer fossil fuel free fund options or ESGs in your 401k, use the fossil free action tool kit to push for more options.