Divesting from Fossil Fuels

Categories: News.

Divesting from fossil fuels seems to be a growing trend marking a change in attitudes towards investing.

People are becoming more aware of ethical options that seek to avoid investing money in industries seen to have a negative impact on the world.

As momentum grows, so do the available options. Supply and demand means more and more ethical options are becoming available and as money heads towards responsibly invested funds so the costs are able to reduce.

In recent news, Merseyside’s pension fund has announced it will seek to divest from fossil fuels (https://patcleary2.blogspot.co.uk/2018/01/merseyside-pension-fund-to-divest-from.html) this follows on from the announcement that New York is intending to do the same. “City officials have set a goal of divesting New York’s $189bn pension funds from fossil fuel companies within five years”.

New York has taken thing a step further and also plan to sue fossil fuel companies for damaged caused by climate change.

https://www.theguardian.com/us-news/2018/jan/10/new-york-city-plans-to-divest-5bn-from-fossil-fuels-and-sue-oil-companies

Ethical Investing:

In the past, Ethical Investing was largely about avoiding companies that were considered to be unacceptable such as those involved in armaments, tobacco, gambling or companies involved in the abuse of human rights and the environment.

Overtime people have come to realise the potential they have to make a positive difference to the way in which companies operate by using share ownership to engage with the company management to improve the way they treat employees, suppliers and the environment.

As pressure increases from consumers, investors and the government companies must begin to act more responsibly.

More good news:

There is no evidence of Socially Responsible Investments (SRI) or Ethical Portfolios under-performing the market (a fact which is supported by a raft of academic literature on the subject). SRI and Ethical Portfolios do however behave differently to a traditional portfolio as they typically have less or no exposure to sectors such as mining, oil and gas.

SRI and Ethical funds typically have the same cost as any other Actively Managed fund despite the additional layer of research involved.

There are even some funds which are cheaper than the wider market as fund managers recognise the rapidly growing demand from customers in this sector.

Can we help?

Yes. We have access to over 40 portfolios available to align with your Ethical Profile and Risk Grade, depending on your tolerance for risk and capacity for loss.

If you wish to investigate your ethical options and look into divesting from fossil fuels, call us on 023 8000 3456 or fill out the form below.