CCM has been managing fossil fuel free fixed income portfolios since 1999. Divesting from fossil fuels is a powerful action. The Divest-Invest movement sends a strong message that investors are taking action for a fossil free future.
Here are four reasons why we think investors should divest from fossil fuels:
- Financial Returns: As President Barack Obama stated, “…there’s no contradiction between a sound environment and strong economic growth.” Fossil fuel divestment can help eliminate future risks associated with climate change and it can create financial return. A study from Impax Asset Management shows that over the past seven years eliminating the fossil fuel sector from a global benchmark index would have actually had a small positive return effect. Furthermore, much of the economic effect of excluding fossil fuel stocks could have been replicated with ‘fossil free’ energy portfolios consisting of energy efficiency and renewable energy stocks, with limited additional tracking error and improved returns.
- Availability: The availability of products across asset classes continues to expand. A useful guide is on the Green America site, Creating a Fossil Free Portfolio. In particular, they mention that there are a growing number of investment products that are free of fossil fuel companies and support clean energy investment and efficiency. Investors can use the list of financial services companies to find funds, certificates of deposit, ETFs, and service providers who can help create a portfolio that meets an investor’s needs.
- Environmental Stewardship: Many of us already support the environment in our daily lives and similar practices can be incorporated into our investment portfolios. Divesting from fossil fuels through your investments is just one way to tackle climate change. Another option is to invest in clean energy, climate solutions and impact investing alternatives.
- Power: As mentioned above, joining the Divest-Invest movement sends a strong message that investors are taking action for a fossil free future. Divestment can be a powerful move when an investor chooses to stop investing into corporations harming the environment and/or a community. Investing into companies, funds, CDs, etc. that are proactively supporting environmentally-friendly activities and initiatives is an important and powerful choice.
To register your intent to divest, please visit: http://divestinvest.org/individual/