photo by quietbits / Shutterstock
If you want to:
Get problematic industries like tobacco, fossil fuels, weapons, and others out of your portfolio
Invest in forward-thinking companies on the cutting edge of green technologies, like renewable energy, water purification, and responsible waste management,
What is it?
- Screening is making the choice to include or exclude investments in your portfolio based on social and environmental criteria.
- Avoidance screens mean that investments that violate your social and environmental criteria are kept out of your portfolio.
- Affirmative screens seek out investments that support business practices in which you believe.
- Investors have put $12 trillion into vehicles in which environmental, social, and governance concerns that integrate into investment decision-making, according to The Forum for Sustainable and Responsible Investing (Also called US SIF).
- “The very act of buying a portfolio that’s more consistent with goals of universal human dignity and ecological sustainability changes the conversation. It expands the mission of companies. 78 global stock exchanges have joined the Sustainable Stock Exchanges Initiative, which means that 45,700 companies now attempt to track their impact on people and the planet. Those things never would have happened had just Wall Street been their shareholders. —Amy Domini, Domini Social Investments
- Do research and screen your own investments, or hire a socially responsible financial advisor to help you. Find one in the “Financial—Advisors & Planners” category at Green America’s GreenPages.org.
If you want to use your investor power to pressure irresponsible corporations to clean up their acts,
Try Shareholder Activism
What is it?
- Shareholder activism/advocacy describes the actions many investors take to press corporations to improve their social and environmental practices—using their status as part-owners of companies as leverage.
- Shareholders, generally in coalition, may start out by dialoguing behind the scenes with corporate management to ask for change.
- If dialogues don’t work, they may introduce a shareholder resolution, which is a formal request to corporate management to change company policies or procedures. All shareholders vote on shareholder resolutions through a proxy ballot mailed to them each spring, or in person at a company’s annual meeting.
- Investors controlling nearly $1.8 trillion in assets filed or co-filed shareholder resolutions between 2016 and the first half of 2018, according to the 2018 Report on Sustainable, Responsible and Impact Investing Trends produced by US SIF. Investors introduced over 386 environmental, social, and governance resolutions, in the 2019 shareholder season, according to As You Sow.
- “Publicly traded companies can benefit from the unique insights offered by their shareholders. Shareholders’ specific views on the marketplace, society, resource constraints, and policy provide us with a clear, powerful, and persuasive voice that can be compelling for corporate directors and management. Through dialogue, shareholder proposals, and other channels of communication, investors serve as an important catalyst for improved ESG policies, practices, and performance.”
—Jonas Kron, Trillium Asset Management
- If you own stock, look for a shareholder ballot to arrive in the mail in the spring, and vote in favor of social and environmental proposals. Visit Green America’s annual shareholder roundup on our key issues at shareholderaction.org.
If you want to:
Put your money to work helping low- and middle-income people lift themselves up economically
Move your money away from predatory mega-banks tied to the foreclosure crisis, and toward institutions that are doing good,
Try Community Investing
What is it?
- The simplest method is to open accounts in a community investing bank/credit union.
- Community-investing vehicles maximize the social impact of your investments, providing capital to low-and middle-income people in the US and abroad who are underserved by conventional banks.
- Other options include CDs and money-market accounts in a community-investing bank or credit union, community-investing loan funds and venture capital, and mutual funds with community investments in their portfolios.
- Thanks in part to Green America and US SIF’s publicity campaigns, the community investing field has grown from $5 billion in 1999 to $185.4 billion currently, according to the US SIF 2018 Trends Report. This sector has experienced rapid growth especially in recent years, nearly doubling in assets between 2014 and 2016 and growing another 50 percent by 2018.
- “Community development financial institutions like HOPE offer a tremendous return on investment. A credit union is a powerful resource that empowers individuals and communities to help themselves. For more than two decades, HOPE has generated more than $2.7 billion in financing that has improved conditions for more than 1 million people in Arkansas, Louisiana, Mississippi, and Tennessee. In collaboration with a strong network of partners ... we equip members to drive positive change. When these kinds of communities have access to the right tools, they thrive. That benefits not only the region, but ultimately the nation.” —Bill Bynum, Hope Credit Union
If you want to send a message to an entire industry that it’s not sustainable,
What is it?
- Divestment means pulling all of your money out of a particular investment or industry.
- The goal is to send a market signal to a company, industry, or government that its actions are not sustainable, and their investors and customers want them to change course.
- As of June 2019, 1,070 institutions representing over $8.77 trillion in assets have made a fossil-fuel divestment commitment. This signifies a 160 percent growth in divested assets just in the last two years. More than 58,000 individuals with about $5.2 billion in assets have committed to divestment as well, according to the Fossil Free campaign of 350.org.
- Investors have divested $4.8 billion from private prisons, according to Freedom to Thrive.
- “Divestment is a powerful strategy, used after other strategies have not achieved the change needed. By pulling assets out of a country, industry, or company, investors declare that entity a pariah, and acutely raise the stakes for the continuation of the unacceptable conduct or policy. Divestment shines a spotlight on an issue that can no longer be ignored, intensifying the pressure for change.” —Fran Teplitz, Green America executive co-director
- Join the Fossil Fuel Divest/Invest campaign and pull your money out of the top 200 fossil-fuel companies. Also, see p. 20-22 about new divestment campaigns afoot to put pressure on the fossil fuel industry, and private prisons and private detention centers.
From Green American Magazine Issue