Category: May 2013 – Sustainable Investing with Impact

Green Transition Scoreboard® Finds Over $4.1Trillion in Private Green Investments

 

The year 2013 promises long strides away from the fossil-fueled Industrial Era as illuminated by the Ethical Markets Green Transition Scoreboard®

(GTS)  (http://www.ethicalmarkets.com/Feb2013.pdf ) which tracks private investments growing the green economy worldwide since 2007, finding $4.1 Trillion invested or committed as of Q4 2012.

The year 2012 was an inflection point for the green transition worldwide. Technology and innovation such as in electricity generation and transport began forcing structural changes and rethinking of business models, urban design and development toward integrated systemic approaches.

The Green Transition Scoreboard® tracks five sectors: Renewable Energy; Green Construction, Energy Efficiency; Corporate R&D and Cleantech, with each broad area of green technologies including substantial capital investment based on Ethical Markets president Hazel Henderson’s years of research as a science advisor and the Ethical Markets Advisory Board  (www.ethicalmarkets.com/about/research-advisory-board ) expertise.

Says Dr. Henderson, “the output of Rio+20 was an unprecedented reintegration of human knowledge, realizing that environmental, social and human capital must be assessed and integrated into financial markets in order to achieve equitable and sustainable forms of development and

resulting in new global shared goals and paths toward low-carbon, cleaner,

greener, information-richer economies.”

INVESTMENTS IN GREEN TRANSITION 2007- 2012

Sector and in US $

Renewable Energy                   $2,281,347,792,080

Green Construction                   $837,620,000,000

Energy Efficiency                      $526,921,247,320

Corporate R&D                         $254,800,000,000

Cleantech                                  $224,601,088,873

TOTAL                                       $ 4,125,290,128,273

The March 2013 GTS report “Green Transition Inflection Point” (http://www.ethicalmarkets.com/Feb2013.pdf ) demonstrates that many private investors are following our recommended avenue for institutional investors to shift to green sectors. This transition strategy, recognized in the 2012 report by Mercer which suggests 40% of portfolios should be in Green Transition sectors, validates models indicating that investing $1 Trillion annually until 2020can scale innovations and reduce costs. With over $4.1 Trillion invested since 2007, investors and countries growing green sectors globally are on track to reach $10 Trillion in investments by 2020.

The GTS omits nuclear, clean coal, carbon capture & sequestration, and biofuels from feedstocks other than sea-grown algae. Fossilized sectors are becoming increasingly stranded assets as low-carbon regulations are implemented and oil, coal and gas reserves become harder to exploit. We are also looking closely at nanotech, genetic engineering, artificial life-forms and 3D printing, determining their green contribution on a case by case basis.

GTS data sources include the highly respected Cleantech, Bloomberg, Yahoo Finance, Reuters and many UN and other international studies, NASA and individual company reports. Companies, organizations and the sources of financial data included in the GTS are screened by rigorous social, environment and ethical auditing standards.

Awareness grew in 2012 of localization as a key principle for redesigning industrial methods, agriculture, infrastructure, sustainable communities as developed by our partner company Biomimicry 3.8 and our joint Principles of Ethical Biomimicry Finance™. Green technologies and systems investments are the next evolution of human societies as we learn from earth systems sciences.

Renewable Energy – Important to this rapidly expanding sector is the growth of renewable energy in developing countries.

Green Construction – This is the most conservatively under-reported sector of this report. We are only counting green construction materials, not including labor.

Energy Efficiency – Investments include conservation efforts and initiatives and products focused on lowering energy needs or using less energy than a comparable product, as companies now recognize efficiency investments’ rapid payback periods.

Green R&D – Significant company investments show sustainability is integrated into its core strategy, serving as a strong indicator for investors. This data helps identify innovative companies ahead of the curve in responding to heightening environmental risks and regulations.

Cleantech – As Cleantech grows, energy storage increases in importance, at the level of power plants and grid electricity and at retail and local levels with improvements in batteries, fuel cells, flywheels, ultra capacitors, flow batterie s, compressed air as well as metering of use at all levels.

“The GTS adopts a much more comprehensive and therefore effective working definition of a green economy than is usually the case, and provides a robust and consistent framework for measuring our progress towards it.”

— Matthew Kiernan, founder, Innovest; CEO, Inflection Point Capital

Management; author, Investing in a Sustainable World

“Wonderful initiative. Finally an overview of the amount of private money invested and committed to Impact Investing.”

— Robert Rubinstein, CEO, TBLI GROUP™

For more information, contact:

Rosalinda Sanquiche, Executive Director

Ethical Markets Media (USA and Brazil)

PO Box 5190, St. Augustine, FL 32085

phone 904.829.3140    /  office@ethicalmarkets.com

Hazel Henderson, Founder and President

Ethical Markets Media (USA and Brazil)

Phone 904.829.3140 /   hazel.henderson@ethicalmarkets.com

Timothy Jack Nash, Director of Sustainability Research

Ethical Markets Media

416-821-9179  /   tim.nash@ethicalmarkets.com

Article Source: Ethical Markets Media  www.ethicalmarkets.com

The Upcycle: Beyond Sustainability – Designing for Abundance

By William McDonough and Michael Braungart
 

From the authors of Cradle to Cradle, we learn what’s next: The Upcycle

The Upcycle is the eagerly awaited follow-up to Cradle to Cradle, one of the most consequential ecological manifestoes of our time. Now, drawing on the lessons gained from 10 years of putting the Cradle to Cradle concept into practice with businesses, governments, and ordinary people, William McDonough and Michael Braungart envision the next step in the solution to our ecological crisis: We don’t just use or reuse resources with greater effectiveness, we actually improve the world as we live, create, and build.

For McDonough and Braungart, the questions of resource scarcity and sustainability are questions of design. They are practical-minded visionaries: They envision beneficial designs of products, buildings, and business practices—and they show us these ideas being put to use around the world as everyday objects like chairs, cars, and factories are being reimagined not just to sustain life on the planet but to grow it. It is an eye-opening, inspiring tour of our future  as it unfolds in front of us.

The Upcycle is as ambitious as such classics as Rachel Carson’s Silent Spring—but its mission is very different. McDonough and Braungart want to turn on its head our very understanding of the human role on earth: Instead of protecting the  planet from human impact, why not redesign our activity to improve the planet? We can have a beneficial footprint. Abundance for all. The goal is within our reach.

Also check out Scientific American excerpt from the book. A section called “Can Soil Replace Oil as a Source of Energy?”

William McDonough and Michael Braungart suggest moving beyond sustainability and into practical design that can result in energy abundance

Praise for Cradle to Cradle

“Asking how a cherry tree would design an energy-efficient building is only one of the creative ‘practices’ that McDonough and Braungart spread before their readers. This book will give you renewed hope that, indeed, ‘it is darkest before the dawn.’”

—Carl Pope, executive director of the Sierra Club

About the Author

William McDonough is an American architect and founding principal of William McDonough + Partners. Michael Braungart is a German chemist. Together they cofounded McDonough Braungart Design Chemistry, and in 2002 they coauthored Cradle to Cradle.

 

GMO Labeling Coming to Whole Foods Market

By Walter Robb and A.C. Gallo, (March 8, 2013)

 

Whole Foods Market commits to full GMO transparency by giving supplier partners five years to source non-GMO ingredients or to clearly label products with ingredients containing GMOs.

Today, we stood up for the consumer’s right to know by announcing that all products in our US and Canadian stores containing genetically modified organisms (GMOs) must be clearly labeled within five years. We heard our customers loud and clear asking us for GMO labeling and we are responding where we have control: in our own stores.

We are the first national grocery chain to set a deadline for full GMO transparency. By 2018, we will require our supplier partners to label products containing GMO ingredients, and we will work in collaboration with them as they transition to sourcing non-GMO ingredients or to clearly labeling products with ingredients containing GMOs.

This is a complicated issue, and we wanted to give our supplier partners enough time to make this change. Fortunately, many of our suppliers are already well on their way to moving to Non-GMO ingredients and a good number are already there. While five years is the deadline, we know there will be progress much sooner and we plan to announce key milestones along the way.

The prevalence of GMOs in the US paired with nonexistent mandatory labeling makes it very difficult for grocery stores to source non-GMO choices and for consumers to choose non-GMO products. Yet we know our customers care passionately. In fact, Non-GMO™ Project (www.nongmoproject.org ) verified products are among the fastest growing sellers in our non-perishable grocery category.

For many years, we’ve sourced our 365 Everyday Value products to avoid GMOs in their plant-based ingredients and in 2009, we began putting this line through the Non-GMO Project verification program and encouraged our grocery supplier partners to do the same. Whole Foods Market currently sells 3,300 Non-GMO Project verified products from 250 brands, more than any other retailer in North America. We will continue this important work and our customers will see more and more Non-GMO Project Verified labels on products throughout our stores.

While the US and Canada still have no labeling laws, more than 60 countries do. However, many US states are currently considering mandatory labeling initiatives, like the one in Washington state, where 500,000 citizens signed a petition last year to move the initiative the next step to their state legislature for consideration. Whole Foods Market supports that ballot measure in Washington and hopes it and other such state initiatives will finally lead to one uniform set of rules in support of the consumer’s right to know. There are also efforts that have made GMOs now part of a national conversation. JustLabelIt.org, for instance, has collected over 1.5 million signatures in support of mandatory federal labeling. And while we are encouraged by the many mandatory labeling initiatives, we are committed to moving forward with our own GMO transparency plan now.

Until the GMO labeling requirement is fully effective, shoppers can rely on Non-GMO Project verified products and certified organic products if they want to avoid GMOs. The US National Organic Standards prohibit the intentional use of GMO seed in the production of organic crops. As a pioneer in the US organic food movement for the past 32 years, we offer thousands of organic products, the largest variety in the country. To ensure a growing supply of non-GMO options for our customers, we are stepping up our support of organic and certified products, and we are growing the non-GMO supply chain with our supplier partners.

We are as excited about this announcement as we are dedicated to supporting transparency and our customers’ right to know what’s in their food.

Source: Whole Foods

 

Online course on the Fundamentals of Sustainable and Responsible Investment launched by the US SIF Foundation

 

Course is part of new Center for Sustainable Investment Education

In early April 2013, the US SIF Foundation launched the Center for Sustainable Investment Education and the Center’s inaugural online course, Fundamentals of Sustainable and Responsible Investment. This is the first online course on sustainable investment for financial advisors and other investment professionals to be launched in the United States.

Fundamentals of Sustainable and Responsible Investment, developed by experts in the field, provides a unique blend of instruction and scenario learning that explains how to talk about SRI with clients, incorporate SRI into investment portfolios and understand the latest trends and research. Paul Hilton, Portfolio Manager at Trillium Asset Management and Vice-Chair of the Board of US SIF and the US SIF Foundation noted that, “There has never been a more important time to help train financial intermediaries to handle the increased demand for SRI from both retail and institutional investors.”

Upon completion, course takers will receive a certificate and have better understanding of this rapidly growing industry. Fundamentals of Sustainable and Responsible Investment is accepted by the CFP® Board for 3 CE credits, and the CFA Institute has also approved this program, offered by the US SIF Foundation, for 3 CE credit hours. On May 21, immediately before the US SIF national conference, a live version of the course will be presented in Chicago.

More information on the online and live versions of the course is available here  (www.ussif.org/courses ). Bloomberg and Morgan Stanley are lead supporters of Fundamentals of Sustainable and Responsible Investment.

The Center for Sustainable Investment Education was created to serve the growing need of investment professionals to gain expertise in the field of sustainable and responsible investment. The Center is easily accessible on the US SIF website and provides investors, investment advisors, consultants, analysts and other investment professionals with access to high quality education, research and thought leadership on sustainable investment.

In addition to the course, resources available at the Center for Sustainable Investment Education (www.ussif.org/education ) include:

*  Fact sheets on the basics of sustainable and responsible investment

*  A wide breadth of high quality research including US SIF Foundation’s biennial Report on Sustainable and Responsible Investing Trends in the United States

*  Information on community investing for retail and accredited investors

*  Thematic handbooks on how to invest to make impact on individual issue areas—How Do I SRI?

US SIF and US SIF Foundation CEO Lisa Woll said, “We are delighted to launch the Center for Sustainable Investment Education and Fundamentals of Sustainable and Responsible Investment—both of them game changers for the field of sustainable and responsible investment.  Research and practical experience tells us that many financial professionals want to know more about sustainable, impact and mission investing, but do not have the tools at their disposal to obtain this expertise. The Center is an easily accessible resource and Fundamentals of Sustainable and Responsible Investment is the first of what will ultimately be a series of online courses covering basic and specialized topics on investing for financial performance as well as social and environmental impact.”

Hilary Irby, Executive Director and Head of the Morgan Stanley Investing with Impact Initiative said, “We are pleased to support the work US SIF is doing to build the field of sustainable and responsible investing.  With increased interest in investment strategies that consider environmental, social and governance issues and opportunities, many financial professionals see this as an opportunity to grow their business. The Center for Sustainable Investment Education can be an effective tool in helping financial professionals better understand market opportunities.”

“Mainstreaming sustainable investing is essentially an educational challenge,” said Curtis Ravenel, Global Head of Sustainability at Bloomberg”. US SIF’s programs help financial professionals apply principles of sustainability — long term value creation — in investing. We believe that this course will provide real value and insight for them as they navigate the increasingly complex issues impacting investment decisions.”

The launch of Fundamentals of Sustainable and Responsible Investment and the Center for Sustainable Investment Education coincides with the unveiling of a new website for US SIF and the US SIF Foundation. The website includes a new Separate Account Managers Chart (http://charts.ussif.org/sam ) which will enable institutional asset owners, family offices, high net worth individuals and advisors and consultants to locate US SIF member separate account managers with expertise in sustainable and responsible investment.

# # #

The US SIF Foundation is a 501c3 organization that undertakes educational, research and programmatic activities to advance the mission of US SIF. The Center for Sustainable Investment Education is an initiative of the US SIF Foundation.

US SIF: The Forum for Sustainable and Responsible Investment is the US membership association for professionals, firms, institutions and organizations engaged in sustainable and responsible investing. US SIF and its members advance investment practices that consider environmental, social and corporate governance criteria to generate long-term competitive financial returns and positive societal impact. US SIF’s members include investment management and advisory firms, mutual fund companies, research firms, financial planners and advisors, broker-dealers, banks, credit unions, community development organizations, non-profit associations, and pension funds, foundations and other asset owners.

Good Morning, Beautiful Business By Judy Wicks

 

(This article is based on excerpts from her new memoir)

Not long after I opened the White Dog Cafe in Philadelphia in 1983, I hung a sign in my bedroom closet in my home above the business — right where I would see it each morning. “Good morning, beautiful business,” it read, reminding me daily of just how beautiful business can be when we put our creativity, care, and energy into producing a product or service that our community needs. I was just beginning my journey. I didn’t know then what I do now: that when you connect head and heart in business, you can transform not just business as usual, but the economy in general. You can find a way to make economic exchange one of the most satisfying, meaningful, and loving of human interactions.

The sign would stay there for many years and would often make me think of my own business, and how the farmers were already out in the fields harvesting fresh organic fruits and vegetables to bring into the restaurant that day. I would think of the farm animals out in the pastures—pigs, cows, goats, chickens—enjoying each other’s company in the warm morning sun and fresh air. And I would think of Dougie Newbold, the goat herder, who claimed that when she kissed her goats’ ears it made their cheese better. And I’m sure that’s true.

Business, I learned, is about relationships. Money is simply a tool. What matters most are the relationships with everyone we buy from, sell to, and work with — and our relationship with Earth itself. My business was the way I expressed my love of life, and that’s what made it a thing of beauty.

The world, though, isn’t always a beautiful place. Not yet, anyway. There is a news photo of a little girl that not only proves that point, but also still haunts me. Though I saw it years ago, I vividly recall how vulnerable she looked in a tattered pink dress, standing on a garbage dump in Haiti, looking for food. The image hovered above a front-page New York Times article telling of a global food crisis, and speculating about the causes for the rise in food prices that had left this little girl and millions like her hungry. Was it the drought in Australia? Or the diversion of corn to ethanol in the United States? Or the increase in meat eating in China? I read the whole article and found no mention whatsoever about the failure of the industrial global food system itself.

The year was 2007, and by then it had become clear to me that to rescue that vulnerable little girl from hunger or, worse yet, abuse and exploitation, we would need to do far more than examine a few episodic causes here and there. We would need to change our failed economic system from one dominated by transnational corporations to one based on local self-reliance—one in which the inevitable fluctuation of prices in the global marketplace would have little effect.

Ideas like that were still far from making it to the front pages of major dailies. But a growing network of people around the world were showing how building strong local economies—rather than relying on transnational ones—could empower communities to feed, clothe, and care for their children and meet the basic needs of all their people.

And the effort wasn’t just to end hunger or rein in poverty or challenge corporate power. No, ultimately, building local food, water, and energy security provides the foundation for lasting world peace.

My new memoir Good Morning, Beautiful Business: The Unexpected Journey of an Activist Entrepreneur and Local Economy Pioneer is the story of how I arrived at that conclusion — from growing up in a small town, to a short but unforgettable experience living with indigenous people, and most of all to creating, over the course of twenty-five years, the White Dog Café. It’s also the story of where that café led me as I worked with others to build a local food system and then a whole new local economy for our community. It’s about how I finally joined with my colleagues across North America in an effort to help relocalize economies and enliven communities across the continent.

But it is also the story of my own awakening from a girl who denied all things feminine, and refused to wear pink, to a businesswoman who found strength in her feminine energy — a quality that’s available to both men and women. I used that energy to build caring business relationships, make heart-based decisions, cooperate with my competitors, and ultimately work collaboratively to build a compassionate and caring economy.

I started my work to build that new economy in the year 2000 with the simple premise that an environmentally, socially, and financially sustainable global economy must be comprised of sustainable local economies. Rather than a global economy dominated by mammoth, and often unnecessary, transnational corporations, I envisioned a global economy as an intricate network of small-to-small, win-win business relationships connecting communities that were self-reliant for their basic needs.

A year later, I co-founded the Business Alliance for Local Living Economies, known as BALLE. If you are wondering just what a “living” economy is, it’s one that supports three areas of life — healthy natural life, vibrant and culturally unique community life, and long-term and just economic life. Examine a thriving local living economy and you’ll find a multitude of locally owned, human-scale businesses committed to the health of their community and their ecosystem. They produce basic needs locally, export the surplus, import—through fair-trade practices—goods not available locally, and develop products unique to their region for exchange in the global marketplace—be it a fashion design, fine wine or cheese, artwork, entrepreneurial innovation or any of the many other things that celebrate what it is to be human.

An important part of building local living economies is directing capital to local investments. My own experience in learning how to invest in this way began in 1999 when I suddenly became a stockholder. After my mother passed away, I inherited a stock portfolio comprised of holdings first purchased by my grandfather and kept in the family for over fifty years. I wasn’t quite sure what to do with the stock. At first I hired a broker to trade my stock for what was considered “socially responsible investing,” but when I looked at my new portfolio, I was shocked to see Wal-Mart! I could not have stock in Wal-Mart, a company known to destroy local economies and underpay its workers. How could I support such a company — even if it had passed through the screens created by brokers for socially responsible investing? That’s when I realized that I did not want to participate in the stock market at all. I wanted to invest in companies that had passed through a different screen, one that can filter out all companies who are not independent, locally owned, and committed to the their community and the natural environment of their region.

So in 2000 I sold all my stock. Luckily for me, Philadelphia has a local investment vehicle called The Reinvestment Fund (TRF), and there I invested my money to be put to work as community capital for such local needs as wind energy production, small business loans, neighborhood revitalization, and affordable housing. To the surprise of my friends, over a ten-year period my local investments at TRF outperformed their stock market returns. When I discovered that the wind turbines bringing renewable electricity to Philadelphia were capitalized by TRF, I coined the term living return. The return on my investment was not only paid in dollars, but by the benefit of living in a healthier community. I began receiving a living return, and with it the happiness and satisfaction of knowing where my money is—doing good right in my own community.

My book is more than a memoir. It is a survival manual. It is certainly not about a utopian dream. Rather it is about solving deep problems unique to our time—and the need is urgent. Today, we are confronted with crises the world has never faced before: a depleted natural environment no longer able to sustain our materialistic society; increasingly severe and erratic weather brought on by global warming; a declining oil supply that will likely, in time, make global transport prohibitively expensive—if burning the oil does not destroy us first.

There is growing wealth inequity; an American political system increasingly controlled by corporate interests; and escalating global violence, social upheaval, and environmental destruction over control and extraction of the remaining oil, freshwater, and other natural resources. It doesn’t have to be this way.

I imagine a future where the little girl in the pink dress is in a different photograph. She’s smiling over an abundant meal of organic locally grown food seated along with the rest of the world’s happy people at what I’ve come to call the Table for Six Billion (or maybe seven or eight). And where are the transnationals who claim we need their mono-crops, fossil-fuel-based pesticides and fertilizers, genetically modified seeds, cruel animal factories, and long-distance transport to feed the world? They are not in the photograph. Turns out we didn’t need them after all.

My book is both a love story and a business book. It’s about a love of life, nature, animals, community, and unique local culture, a love of good food and family farms, and a love of democracy — all being threatened by a global economic system driven by profit. It’s also about a deep love of business, and how we can embrace a way of doing business that is beautiful, that nurtures all that we cherish, and that furthers the creation of a whole new economic system based on caring relationships.

Article by Judy Wicks. She is an entrepreneur, activist and author working to build a more compassionate, environmentally sustainable and locally based economy. Her memoir Good Morning, Beautiful Business: the Unexpected Journey of an Activist Entrepreneur and Local Economy Pioneer was published in March 2013. Judy is founder of Philadelphia’s landmark White Dog Café known for its leadership in the local food movement. She founded several non-profits including Fair Food Philly and the Sustainable Business Network of Greater Philadelphia, and co-founded the nationwide Business Alliance for Local Living Economies (BALLE), a network of 30,000 local independent businesses in 80 communities. In 2009, Judy sold the White Dog through a unique agreement that preserves local, independent ownership and maintains sustainable business practices, including buying from local farmers, composting and using renewable energy.

For more on the book and to buy a copy go to- www.chelseagreen.com

Taking Another Look: The Business Reasons Why Financial Advisors Should Care about Fossil Fuel Free Investing

 

To divest or not to divest? That is the burning question.

It began with a Rolling Stone article. Then came a 21-city tour that was part educational lecture, part political rally and part rock concert. Now, author and activist Bill McKibben’s call for institutional investors to phase out of coal, oil and gas investments has become the topic of position papers, articles and discussions within the socially responsible investment community and beyond. By the time this article appears, a series of broader presentations and discussions will also be underway – from a Boston multi-faceted discussion prompted by an upcoming divestment vote within the Unitarian Universalist Church to Bill McKibben’s appearances at the Ceres and U.S. SIF conferences. While the socially responsible investment community has articulated different responses to this national campaign, Green Century Capital Management [Green Century] (www.greencentury.com ) believes there are many reasons – including three key business growth solutions – that argue this issue merit closer attention by financial advisors around the country.

Before we delve into reasons relevant for socially responsible investment advisors, here’s a quick recap of the issue:

•  Climate change is one of the most profound threats of our time. While this fact has long been apparent, Superstorm Sandy, destructive wildfires in the West, and historic flooding from Vermont to Iowa have made climate change a more tangible issue for millions of people. An April 2013 Gallup Poll found that Americans’ concern about global warming is rising.

More people are starting to understand that climate change poses an immediate threat to our quality of life. One no longer has to imagine how carbon emissions will make our weather and lives more erratic and unpredictable. Within the last year, homeowners, business leaders and parents saw how their children and grandchildren were inconvenienced, threatened or harmed as a result of our burning so much fossil fuel that we have changed our weather.

•  Led by Bill McKibben, U.S.-based nonprofit 350.org is leading the call for institutions to not make new investments in 200 targeted fossil fuel companies and to begin their transition out of these investments over the next five years. The campaign – which began on campuses and has now spread to cities and institutions – has become a highly visible movement, spanning 188 countries, and shows no signs of slowing down. While certainly a critical result, the most powerful effect of divestment is not the number of dollars that are moved, but rather the message that divestment sends to corporate boardrooms, shareholders and policy leaders.

•  Although there has been increased attention from many corners – including President Obama in his State of the Union address and businesses such as eBay* and Nike* – companies have been largely silent on climate impacts, such as supply chain risks and right to operate risks. Many SRI firms have not yet changed their approach, and continue to stand behind their investments in major fossil fuel exploration, refining and production companies. Nevertheless, some changes are afoot within the industry. First Affirmative Financial Network recently added a fossil fuel free investment strategy. Other SRI financial advisors such as Natural Investments are constructing their own models to meet their client’s requests. Green Century, which has two lower carbon mutual funds, has seen notable inflows of assets to its fossil fuel free Balanced Fund [GCBLX].

But, why should financial advisors consider offering lower carbon options? Setting aside the environmental and moral reasons that many might find compelling, Green Century offers three concrete business driven reasons:

1.  Fiduciary Responsibility. The assertion that not investing in the fossil fuel sector violates your responsibility casts aside track records and recent studies. For one, advisors would do well to examine new evidence that suggests a fossil fuel portfolio need not compromise returns. A new study by the investment firm Aperio Group indicates that screening out the whole traditional energy industry only adds a small amount of increased risk to a portfolio.** Furthermore, coal, oil and gas companies face the uncertainty of regulatory changes and new policies that could place limitations on carbon use. Matt Patsky, CEO of Trillium Asset Management and a portfolio manager of the Green Century Balanced Fund explains: “By divesting now from companies that hold fossil fuel reserves, investors may avoid the long-term risk of the potential devaluation of the fossil fuel reserves that companies now hold, but may never be able to use.”

2.  Current Demand. It’s likely that some of your clients have asked about keeping their investments out of coal, oil, or gas or all three – and if they haven’t yet, it’s only a matter of time. For some, it is a new question that requires new answers. While past inquiries may have been easier to delay, investors, emboldened by this new movement, are increasingly demanding changes now.

As the repercussions of climate change manifest themselves in our daily lives, more people will be motivated to act on their concerns in ways that extend to their investments. One Boston area financial advisor recently related the story of a high net worth client who had been asking him about moving her money out of fossil fuels for the last two years. At their fall meeting, her inquiry had turned into a directive: “Move my money.” Readying yourself to act on these interests and requests of clients can be part of your smart business strategy.

3.  Business Growth Potential. Bringing in younger investors is a key business development strategy for many advisors and firms. Environmentally minded clients, whether beginning to participate in or take control of family investments, or starting to invest on their own, are very likely to have climate change as one of their top concerns. From city to city, recent college graduates describe climate change as “my generation’s issue.” They remember the oil-covered birds and flames from the Deep Horizon accident and more recently, the water rushing through the turnstiles of the NYC subways. They are not trying to stop climate change for someone else – they are doing so out of their own self-interest. This makes their conviction stronger and likely longer-term. SRI advisors will be better able to attract and retain this pool of investors if they offer funds and portfolios that address the core issue of carbon emissions.

Bottom-line, SRI clients want to know how their investments are making the world a better place. What will be the story you and your clients can tell together and to their families? One that recognized the threat of climate change and took part in the movement to address the issue could position advisors well.

While traditional investment firms are just now coming to terms with the realities of fossil fuel free and lower carbon investing, Green Century has been on the forefront of clean energy and environmentally responsible investing since its founding in 1991. As the only investment advisory firm founded by nonprofit environmental advocacy organizations, Green Century believes that companies that use environmentally-destructive practices and policies are not just bad for the planet – such policies can also create significant risks and disadvantages for companies. Since 2005, Green Century’s Balanced Fund (GCBLX) has been 100% fossil fuel free; the Fund does not invest in the exploration, drilling, refining or production of oil, gas or coal. In April, Green Century announced that the Balanced Fund is 49.5% less carbon intensive than the S&P 500® Index***. Its 2013 Carbon Footprint Analysis was conducted by Trucost, a leading environmental data and analysis firm.

Green Century’s Equity Fund offers another lower carbon option. The Fund does not hold coal or oil corporations, but does hold several natural gas companies that meet environmental screens. The Fund invests in the approximately 400 companies that comprise the oldest and most well-respected sustainability index, the MSCI KLD 400 Social Index. Through the Equity Fund, Green Century uses its clout as a shareholder to co-lead a coordinated investor campaign on hydraulic fracturing, more commonly known as fracking. Green Century believes that shareholder advocacy can achieve significant improvements in this controversial natural gas extraction operation and we have a unique window of opportunity. Five years ago, when Green Century started working on fracking, companies were not only entirely silent on its risks, but staunchly opposed to providing disclosure. Through the course of filing shareholder resolutions and dialoguing with companies, Green Century and its allies have succeeded in convincing companies to markedly increase their reporting on their operations and reduce water use in some locations. Currently, shareholder advocates are focusing on challenging companies to reduce their use of toxic chemicals to protect our air, water, land and local communities.

Why did Green Century make these decisions on fossil fuels? Since our founding over 20 years ago, Green Century has believed that global warming is a key issue facing our planet; we chose to provide vehicles for investors who wanted to steer clear of some or all fossil fuel companies. Green Century also uses its clout as a shareholder to advocate for improved environmental performance and more sustainable business practices. Since our founding, Green Century has engaged over one hundred companies through shareholder advocacy, helping them to improve their environmental performance, decrease risk, and capture opportunities.

So, to divest or not to divest? That is the question that each investor must decide for him- or herself. Our climate is already changing. As a result, current and new investors will continue to want to make a difference on this issue through their investments. By listening to clients, being willing to dispel outdated notions and by offering lower carbon options, financial advisors will serve their clients, nurture their businesses and protect the planet. At Green Century, we see that as a win, win, win outcome.

Article by Leslie Samuelrich, Senior Vice President, Green Century Capital Management

Article Notes:

* As of March 31, 2013, NIKE Inc. and eBay Inc. comprised 0.00% and 0.69% and 0.00% and 1.03% of the Green Century Balanced Fund and the Green Century Equity Fund, respectively. References to specific securities, which will change due to ongoing management of the Funds, should not be construed as a recommendation by the Funds, their administrator, or their distributor.

** Patrick Geddes, Aperio Group, Do the Investment Math: Building a Carbon-Free Portfolio.

*** The S&P 500® Index is an unmanaged index of 500 selected common stocks, most of which are listed on the New York Stock Exchange. The S&P 500® Index is heavily weighted toward stocks with large market capitalization and represents approximately two-thirds of the total market value of all domestic stocks. It is not possible to invest directly in the S&P 500 ® Index.

You should carefully consider the Funds’ investment objectives, risks, charges and expenses before investing. To obtain a Prospectus that contains this and other information about the Funds, please visit www.greencentury.com  for more information, email info@greencentury.com or call 1-800-93-GREEN. Please read the Prospectus carefully before investing.

Stocks will fluctuate in response to factors that may affect a single company, industry, sector, or the market as a whole and may perform worse than the market. Bonds are subject to risks including interest rate, credit, and inflation.

The MSCI KLD 400 Social Index is a free float-adjusted market capitalization index designed to provide exposure to U.S. companies that have positive Environmental, Social and Governance (ESG) characteristics and consists of 400 companies selected from the MSCI USA Investable Market Index. It is not possible to invest directly in an index.

The Green Century Equity Fund (the “Fund”) is not sponsored, endorsed, or promoted by MSCI, its affiliates, information providers or any other third party involved in, or related to, compiling, computing or creating the MSCI indices (the “MSCI Parties”), and the MSCI Parties bear no liability with respect to the Fund or any index on which the Fund is based. The MSCI Parties are not sponsors of the Fund and are not affiliated with the Fund in any way. The Statement of Additional Information contains a more detailed description of the limited relationship the MSCI Parties have with Green Century Capital Management and the Fund.

The Green Century Funds are distributed by UMB Distribution Services, LLC 4/13

The 2013 US SIF Conference “Finance for a Sustainable Future”

 

This event being held May 20-22 in Chicago, IL offers a unique opportunity to network with leaders of sustainable and responsible investing, to hear from leading investors, CEOs and policymakers, and to learn about new approaches, trends and policy developments in the field.

The conference will attract representatives of investment management and advisory firms, research firms, financial planners and advisors, broker-dealers, community development institutions and asset owners such as pension funds and foundations, along with policymakers and corporate leaders.

Additionally, we will be offering several fee-based off-site activities on the morning of Tuesday, May 21, including a training on US SIF Foundation’s first professional education course. Fundamentals of Sustainable and Responsible Investment, is primarily geared for financial advisors and other financial professionals and will provide a thorough overview of the practice of SRI.

Off-site options also include an Architecture River Cruise, and a tour of the Plant, Chicago’s vertical farm and food business incubator.

Please note: US SIF member-only events will take place on May 20. The Main Conference will take place on May 21 and 22. For information on becoming a US SIF member, please visit our website at- http://www.ussif.org

Speakers include: Curtis Ravenel, Global Head of Sustainability at Bloomberg; Erika Karp is a Managing Director and Head of Global Sector Research at UBS Investment Bank; Rev. David M. Schilling has worked at the Interfaith Center on Corporate Responsibility (ICCR); Russell D. Feingold represented Wisconsin in the United States Senate for 18 years from 1993 to 2011; Mellody Hobson is president of Ariel Investments; Joseph F. Keefe is President & Chief Executive Officer of Pax World Funds; Shari Berenbach is the President and Chief Executive Officer of the United States African Development Foundation; Francis Coleman, Executive Vice President at Christian Brothers Investment Services (CBIS); Karen Weigert serves as Chief Sustainability Officer for the City of Chicago; and Bill McKibben, a well known environmental author and activist, is the founder of 350.org

Location: Westin River North, 320 North Dearborn Street, Chicago, IL

For conference details and agenda go to- http://bit.ly/Wpqdtb

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