Divestment and You

Invest in a clean energy future.If you don’t manage a stock portfolio you might be thinking: “divestment has nothing to do with me.”  However, if you’re employed and over 40, even if you don’t own stocks, you probably have a 401K or retirement fund or maybe a bond or two and any one of those may have fossil fuel company investments.

Before we get going, I’d like to turn the whole divestment thing around. It sounds so negative. Instead, let’s think of investing in a financially secure future for you and a clean energy future for your children.

Investing in Clean Energy
You know the old adage: buy low sell high, right? Good investors, among other things, have an uncanny ability to read market trends. Wouldn’t it be great to see into the future? Well, with climate change we almost can. We can see how other parts of the world are dealing with the side effects of climate change and which industries are impacted. Hmmm.

Let’s take a gander at China’s air pollution problem, (its so bad, Panasonic is paying it’s employees hazard pay) which might foreshadow what will happen in the U.S. if we mismanage air quality control. What is China doing to solve its problem? They know they have to reduce their reliance on coal. They are looking at synthetic natural gas but that consumes a lot of water, so solar may be one of their best options.  Solar, solar, I know I remember reading something about that….

If you start looking at clean energy investments you wouldn’t be alone. Goldman Sachs has “declared the renewable energy sector to be one of the most compelling and attractive markets – and is backing up its talk with $40 billion of made and planned investments.” And, you know these guys like to make money. ‘Nuff said.

China isn’t the only country reconsidering its use of coal. So, here’s the other side of the coin: valuations of the coal industry and other fossil fuel companies are dropping.

Along with opportunities, most investors like to mitigate risk. Never thought holding onto all those fossil fuel company stocks such as Exxon, Chevron, BP, and Royal Dutch Shell would be risky did you? However, “the reduced demand for fossil fuels driven by non-policy factors such as increased renewable energy, energy efficiency and fuel switching creates risks for investors who own fossil fuel companies.”  Never mind the fact that if we follow British Columbia’s example and start taxing carbon emissions (which I think we should), our current relatively inexpensive energy sources will be more on a par with renewable energy costs.

Oh, and March 27th you can see what BC has learned after 5 years of taxing carbon emission – free live streaming on FaceBook.

Investing in Your Retirement and the Future
If you have a 401K you may still be wondering, what can I do? Look at your 401K investments then talk with your Financial Advisor to encourage the retirement company to offer clean energy funds, if they don’t already. Or, if you’re self-employed or just want to open a regular investment account, you might consider Green Century Funds, both their Balanced Fund and Equity Fund are fossil fuel free.

Ceres, a nonprofit which mobilizes business and investor leadership on climate change, estimates that to have an 80% chance of maintaining two degrees Celsius above pre-industrial levels, to avoid the worst impacts of climate change the annual global investment in clean energy needs to be at least a trillion by 2030. Of course, that’s not just individuals, it’s pension funds, insurance companies, endowments, foundations and investment managers. Oh, yeah, pester your investment manager if you have one, they might not see the potential long term gain and risk mitigation climate change could have on your portfolio.

Climate change might even make the bond market sexy (well as sexy as bonds get). SolarCity Corp is the first company to sell bonds backed by rooftop solar panels.  Might be worth looking into.

Your money helps to grow industries, please spend it wisely.

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