“I want my money to have a positive impact in the world but my dad (uncle, mom, broker) said that was a stupid idea. Is it?”
That depends. If what you mean by “a positive impact in the world” is that your broker simply screens out investments in certain companies or industries, well, sorry, yes, that on its own might be a bad idea. That approach could damage a portfolio.
If you’re serious about getting your money to make a real difference for people and the planet by investing in all kinds of good things with smarter financial analyses and strategies, yes, we believe this is a really good idea.
“Ok, but how can I do all that?”
Natural Investments maintains stringent and thoroughly researched investment due diligence standards and procedures. No system is perfect, but we have developed a strong process over the last few decades of work. Here are some of the pillars of our investment strategy:
On March 27, 2017, the Global Sustainable Investment Alliance (GSIA) released its biennial Global Sustainable Investment Review 2016, showing that global sustainable investment assets reached $22.89 trillion at the start of 2016, a 25% increase from 2014.
Socially responsible investment (SRI) continues to grow as a favored set of investment strategies:
Europe accounts for 53% of these assets, the United States at 38%.
In nearly every market represented in the report, sustainable investing has grown in both absolute and relative terms since the beginning of 2014.
Environmental, social, and governance performance and/or criteria integration is being applied to $10.37 trillion in assets.
Growing global concern over climate change has resulted in rising interest in green finance, including climate-aligned bonds.
Fiduciary duty and client demand are key growth drivers for sustainable investing.
While institutional investors hold the largest percentage of SRI assets, with pension funds often comprising the largest percentage of institutional SRI assets, interest by individual and family investors is growing. The relative proportion of individual and family SRI investments in Canada, Europe, and the United States increased from 13% in 2014 to 26% at the start of 2016. Over a third of SRI assets in the United States were owned by individuals and families.
Now in its third edition, the biennial Global Sustainable Investment Review is the only report presenting results from Europe, the United States, Canada, Asia, Japan, Australia, and New Zealand. The report draws on in-depth regional and national reports from GSIA members—Eurosif, Responsible Investment Association Australasia, RIA Canada, and US SIF—as well as data and insights from the Principles for Responsible Investment, JSIF (Japan), LatinSIF, and the African Investing for Impact Barometer. Together, these resources provide data points, insights, analysis, and examples of the shape of sustainable investing worldwide.
About Global Sustainable Investment Alliance
The Global Sustainable Investment Alliance (GSIA) is a collaboration of membership-based sustainable investment organizations around the world. It includes US SIF, UK SIF, Eurosif, RIA Canada, VBDO (Netherlands), and the Responsible Investment Association Australasia (RIAA). The GSIA’s mission is to deepen and expand the practice of sustainable, responsible, and impact investing through intentional international collaboration. Our vision is a world where sustainable investment is integrated into financial systems and the investment chain and where all regions of the world have coverage by vigorous membership based institutions that represent and advance the sustainable investment community. www.gsi-alliance.org
This article is highlighted as part of the 100th issue special, celebrating twenty-five years of quarterly newsletters.
Natural Investments has offered fossil-fuel-free portfolios for over a decade. With renewable energy hitting a tipping point and climate change concerns gripping the world, we are proud to have been one of the earliest voices advocating for fossil-fuel divestment.
A rapidly increasing segment of the investment world is coming to the realization that not only is carbon pollution putting our planet’s future at risk, but that the big energy extraction companies are dragging down the returns in their portfolios. Oil is not well on the energy investing front!
The fossil fuel divestment movement is coordinated by Bill McKibben’s 350.org and members of US SIF (The Forum for Sustainable Responsible Investment) to encourage universities, endowments, and family of ces to implement divestment strategies. Divestment is often implemented by selling off (or just not buying) stock in the Carbon Underground 200. CU200 consists of the companies that own the largest untapped reserves of fossil fuels. The idea is that this coal, oil, and gas needs to stay where it is to avert climate catastrophe.
Divestment historically faced fairly stiff headwinds from money managers and trustees. They claimed that univer- sities, foundations, and individual investors would suffer if they forgo investment in coal and oil companies that were once solidly performing stocks. Recent analyses cause us to question those claims. In fact, the new information is being taken to heart by investors. According to GoFossilFree.org, 629 institutions with a total of $3.4 trillion have committed to full or partial divestment, including seventy colleges and universities, 128 foundations, and 111 cities and towns, and they’ve been joined by over 50,000 individual investors.
Divestment probably doesn’t make much of a dent in the wallets of fossil fuel companies, some have asked, so why bother? Yes, but the movement is not naïve to the deep pockets of these companies.