What’s at Stake? A Livable Climate Future

Americans will soon vote in an election with unprecedented stakes. The outcome of the presidential and Congressional races will determine whether this country continues its rapid descent into xenophobia, isolationism, and climate nihilism—or whether we open a doorway of possibility to a better future.

While the issues facing us all are myriad and complex, the climate emergency is one of the most pressing issues of our time. UN climate scientists warn that if we do not achieve a radical transformation of our global, national, and local economies within the next 10 years, organized societies will begin to collapse in a prolonged climate catastrophe.

The urgency of our climate crisis requires that we pursue every action, big and small, macro and micro, collective and individual. From lobbying our elected leaders to changing our consumption patterns, our actions matter. One of the biggest impacts we can make as individuals is to align our investments with our climate values.

The pandemic wrought death and tragedy on an unimaginable scale, as well as an opportunity to make this realignment in a rapidly changing world. COVID-19 has caused massive financial disruptions throughout the global economy. This is apparent in the number of people in the US and throughout the world who have lost their jobs because of stay-at-home orders and business closures implemented to slow viral spread. The pandemic also shook the financial markets, with the energy sector and fossil-fuel stocks taking a particularly hard hit. As socially responsible investors, we have been steadily pushing this realignment forward through our longstanding practice
of fossil-fuel divestment and affirmative investment in renewable energy.

All Natural Investments models already have extremely low exposure to fossil fuel production, extraction, and distribution compared with most unscreened non-SRI portfolios and indexes. Our fossil-fuel-free portfolios, by definition, have no exposure to this sector. Our definition of fossil-fuel-free is the avoidance of any company that derives one percent or more of its revenue from the production, extraction, or distribution of fossil fuel or, in the case of utilities, the burning of fossil fuels to produce electricity. We invest in fossil-fuel-free funds, including those offered by Green Century––which offered the first such funds and is an institution that shares our vision of socially responsible investing. Other funds with new commitments to being fossil fuel-free include Parnassus funds and some Pax funds which we also utilize in our portfolios.

Funds we hold in our fossil-fuel-free portfolios not only avoid investment in the fossil-fuel industry but also affirmatively invest in renewable energy companies, such as Hannon Armstrong, Inc. Hannon Armstrong provides financing to a number of renewable-energy projects and energy efficiency projects around the United States. For instance, Hannon provided financing to the local government in my home of Louisville, Kentucky, to make updates to the boilers, HVAC units, and electrical systems of multiple government buildings across the city. These upgrades reduce annual carbon emissions by more than 12,000 tons and save the city approximately $2 million per year.

Other funds in our portfolios include companies that directly own solar and wind power facilities, like Brookfield Renewable Partners. Brookfield’s renewable portfolio produces more than 19,300 megawatts of electricity each year. Brookfield has solar, hydro, and wind facilities located in 30 US states and owns projects in Canada, Chile, China, India, South Africa, Spain, Portugal, the United Kingdom, and Uruguay. The projects not only cover an expansive geography but are also diverse in size, ranging from small projects producing less than five megawatts annually to large projects producing more than 800 megawatts of power each year.

In addition to affirmatively investing in publicly-traded, renewable energy companies, Natural Investments clients also invest in private companies such as Namaste Solar and Sunwealth. Namaste’s areas of business include residential and commercial solar panel installation in Colorado and other states. Namaste also provides solar-panel maintenance and consulting services. Sunwealth installs and owns solar projects throughout Massachusetts and the Northeastern United States. In addition to commercial projects, Sunwealth is also committed to providing residential solar panels to economically marginalized communities that have not traditionally had access to renewable energy options.

The COVID-19 pandemic has given us a glimpse of how our world can begin to be transformed by great reductions in the use of fossil fuel. Less smog and better air quality resulted from decreases in greenhouse gas emissions during lockdowns. Moreover, technology illustrated that drastic reductions in commuting and business travel are possible. As socially responsible investors, we have made the choice to divest from the fossil fuel past and embrace and affirmatively invest in a renewable energy future. Divestment, coupled with affirmative investment, is the right thing to do in a world yearning for positive change. Whatever the outcomes of the US elections this November, we can and do choose to confront and mitigate the climate change crisis through our own actions and through how we invest our money.

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Joel Koerner

Joel Koerner

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