Are you an individual investor interested in moving your money out of fossil fuels?
If you’re ready to commit, take the Divest-Invest pledge to let the world know you’re taking action for a fossil free future:
And here’s how you can get started:
Step 1: Find out how much you have invested
How much money have I invested in fossil fuel companies? If you have a financial advisor or money manager, send them to the top 200 coal, oil, and gas companies by carbon reserves and ask them to calculate the amount of your holdings that are represented on that list. If this is not something they are willing to do, let them know that this has become an important investment criteria for you and that you will be exploring your options. You may also Search for mutual funds from your portfolio or retirement plan and find the fossil fuels hidden within through using Fossil Free Fund tool
In general, well balanced or diversified funds (mutual funds, 401Ks) have around 10 percent in fossil fuel investments (of course this number will vary depending upon your investment strategy).
Step 2: Look for fossil fuel free investments
What are your options for fossil fuel divestment? There are a growing number of mutual funds, ETF’s and portfolios that avoid the top 200 companies or all coal, oil and gas companies. You can find mutual funds by using Fossil Fuel Funds. Green America also maintains a list of fossil free investment options and The Forum for Sustainable and Responsible Investment maintains these resources showing which managers and mutual funds are fossil free: Sustainable & Responsible Mutual Fund Chart & Separate Account Managers Chart (click on screening and advocacy for fossil free options that might weight “sustainable” investments).
The divestment campaign has helped create a demand for more investing options, but not all of these options share the same screens. A few things to note, which are explained more in the new individual divestment and reinvestment guide.
“Low carbon” is not synonymous with fossil fuel free and some, but not all, fossil fuel free investment strategies include additional factors (such as avoiding military weapons).
Step 3: Look at performance and fees to find out what’s best for you
There is an ever-growing body and analysis that that examines how avoiding fossil fuel companies impacts performance, including the potential financial benefits of lower volatility, avoidance of stranded assets and increased dividends. When you look at the track record of any investment, look at different time periods and remember that fees are usually included in performance numbers, but not benchmarks. You should also assess the fees such as a load fee and basis points to determine which investment management approach works best for you. Get more details in this section on fees.
Step 4: Consider investing in a sustainable clean energy future
We have a responsibility and an opportunity to ask ourselves how moving the money itself (and not just the fight to move it) can help us usher forth our vision. What could we build with the resources that used to uphold the Fossil Fuel industry? Here are a few resources to help you think through this:
- Reinvestment Principles
- Make a Clean Break: You Guide to Fossil Fuel Free Investing (Trillium Asset Management, Green Century Funds, & 350.org)
- wedivestinvest.org (DivestInvest Individual)