If you’re like most people with a 401(k), you probably don’t know which companies are in your mutual funds, let alone whether those companies have policies to support gender equality or how many women they have on their board of directors or senior management team.
Read MoreSome investment services firms are trying to address the problem by embracing what’s known as “gender lens investing.” The idea is to get investors to put their money into companies that advance gender equality.
Read MoreWeapon Free Funds breaks down the individual offerings from investment companies. The Equity Index 500 fund from T. Rowe Price, for instance, has 18 weapons stocks; its New Horizons fund has just three. The Health Sciences, Emerging Markets, and Global Technology funds have no weapons companies. Users can also pick their battles, as it were–filtering on all types of weapons makers or on just military weapons or just civilian firearms.
Read MoreMSCI also has carbon-footprint data, while As You Sow has a fossil-free screen for mutual funds but no carbon-data metric, says Christina Alfandary, managing director of ESG for Gamco Asset Management. “Some investors want to see this [expanded] carbon portfolio information,” she says. Now they can.
Read MoreProxy Preview 2018 (As You Sow, the Sustainable Investments Institute and Proxy Impact) features more than 400 shareholder resolutions filed on environmental, social and governance issues. The top three shareholder issues are political activity spending (80 resolutions), climate risk (80 resolutions) and equal treatment for women (70 resolutions). The 125 corporate signatories to the RE100 campaign need to add 87 gigawatts of new wind and solar power capacity worldwide by 2030 to meet their 100 percent renewable energy commitments, according to Bloomberg New Energy Finance research. The report suggests that not all of the RE100 members will meet their commitment.
Read MoreAsset managers can now choose from a multitude of fossil free investment indices. Fossil Free Funds, a project initiated by the NGO As You Sow, allows anyone to check whether their portfolios and pension plans contain fossil fuels.
Read More"It's low-hanging fruit for companies to extend ESG into retirement planning," said Andrew Behar, CEO of As You Sow. "Seventy-four percent of Fortune 1000 company employees want to invest in a future they can live in." For some, it may be fossil fuel-free, for others it could be gender equity and for others, a weapons-free fund.
Read MoreAndrew Behar: Corporate managers are responsible to their boards of directors and their boards are responsible to the shareholders. In terms of power, shareholders often have the last word, especially with a strong vote.
Read MoreIn 2016, according to non-profit As YouSow.org, which advocates for green-focused investors, only one of the 100 largest 401(k) plans offered a fund choice that could be classified as social, responsible, or impactful – which can achieve green benefits for nature and stronger financial return potential.
Read MoreNow there is a tool, the website Fossil Free Funds, that helps pinpoint funds and E.T.F.s focused on companies withsmaller carbon footprints. “There were 10 funds when we started that we identified as fossil-fuel free,” said Andrew S. Behar, chief executive officer of As You Sow, the Oakland, Calif., environmental group that created Fossil Free Funds. “Now it’s up to 31.”
Read MoreIn the one year since Corporate Knights and As You Sow started the Clean200 rank list, the Clean200 companies generated a return of 16.9 percent versus a decline of 1.2 percent for its fossil fuel benchmark the S&P 1200 Global Energy Index.
As You Sow has engaged as shareholders with the electronics, consumer goods and beverage industries over the past two decades to promote corporate responsibility for recycling products and packaging. Carpet makers represent another important industrial sector struggling to make meaningful progress on recycling, and we intend to engage with shareholders of several large publicly traded companies to improve performance in light of problems that have surfaced recently.
"We intend to engage with shareholders of several large publicly traded carpet companies to improve performance in light of problems that have surfaced recently."
"Carpet makers should spend less time hindering vendors to engage on recycling policy and more time figuring how to redesign carpet to make it recyclable."
Read MoreFossil Free Funds scorecards investment companies for carbon contamination. It informs us, for example, that the Vanguard Health Care sector fund (VHT) is relatively innocent, accounting for 8 tons a year of carbon dioxide, or the equivalent in other greenhouse gases, per $1 million salted away. VHT is clean because Pfizer and Merck don’t own steel foundries. With an index fund you'd be looking at 155 tons.
Read MoreQ5: How should sustainable investors react to 2016's political events?
"In the U.S., we need to defend against any efforts to weaken our ability to engage and file shareholder proposals with companies. Small and medium-sized shareholders, like those of many SRI firms, have often been the early warning system to companies on business risk. It is often passionate smaller investors who educate companies first on issues that could blow up eventually into big crises, like toxic ingredients, air and water pollution and waste, and supply chain labor rights. In many instances, these are brought initially to investors’ attention by committed social and religious investors."
Read MoreDon’t assume mutual funds meet this standard just because they’re designated as “socially responsible.” Instead, run the funds through an online tool created by As You Sow, a group that presses for corporate responsibility. The tool makes it easy to spot fossil-fuel exposure and identify greener options.
Read MoreThat brings us back to the carbon that may be hiding in your mutual fund or 401(k). One of the pioneers in the divest/reinvest movement is the nonprofit foundation As You Sow, which works with shareholders to improve corporate accountability. It has developed a tool that finds the carbon in thousands of the most common mutual funds and retirement plans. It does the detective work instantly and cost-free with up-to-date data.
Using 401(k) retirement plans as an example, As You Sow’s explains “those funds can invest in a wide array of securities, and it’s not always easy for investors to investigate what’s inside the funds they own. You can spend hours poring over mutual fund prospectuses, and still not fully grasp everything your 401(k) is invested in. Your retirement money may be invested in economically and morally risky fossil fuel companies.”
Read More“If what you read about stranded assets is true, it’s a potentially serious problem for regular, middle-class people who aren’t necessarily paying attention,” says Cari Rudd, a Washington DC-based communications consultant, who does social media work for Divest-Invest and sits on the board of As You Sow, an Oakland, California-based nonprofit that promotes environmental and social corporate responsibility through shareholder advocacy.
For example, As You Sow’s Fossil Free Funds, which uses data from Morningstar, is a free online tool that allows investors to type in the name or ticker of a fund and see what percentage is invested in fossil fuels. Earlier this month, the organization expanded Fossil Free Funds to include a feature that shows each fund’s carbon footprint and which companies are the main contributors. For 401k participants who don’t have direct control of selecting the funds offered in their retirement plan, As You Sow also provides advice on how to speak to their employers about expanding their company’s plan to include low-carbon options.
Read MoreThe ranking of 1,200 UK funds by As You Sow, a non-profit organisation, comes as concerns mount that investors could suffer big losses if companies with large carbon footprints are negatively affected by attempts to tackle climate change.
Two funds from Standard Life Investments, the Scottish asset manager, and a fund from Schroders, the UK’s largest listed asset manager, ranked among the five products with the largest carbon footprint, according to As You Sow.
The As You Sow research covered 8,500 investment products globally. Besides allowing investors to find out if they are exposed to climate change risks, it also revealed huge differences in how exposed the UK’s largest funds are to polluting industries.
Read More“We come from the shareholder-advocacy perspective. We saw a need for transparency,” says Andrew Behar, CEO of As You Sow, a nonprofit organization promoting corporate responsibility. As You Sow partnered with global environmentalist network Friends of the Earth to launch the database, which was inspired by a similar tool, focused on fossil fuels, designed by As You Sow in 2015.
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