By Brittany Damico, Business Development Specialist, The Wealth Consulting Group
This week in our #WCGImpactSeries we’re providing insight into how the #ESG consideration of fossil fuel free investing can impact your portfolio and the planet.
The integration of ESG analytics can provide valuable insight about company practices and the potential benefits or risks associated with those practices. These analytics apply to all the three categories of #ESG – Environmental, Social, and Governance. Although, with the perils of climate change on the rise, the Environmental category has been receiving increased attention. One of the main trends that has erupted over the past twelve months is the concept of fossil fuel free and low carbon investing.
What is fossil fuel free investing?
For many investment fund families, the divestment from fossil fuels means not investing in companies whose only, core, or majority business is the exploration, extraction, refining, processing, or distribution of fossil fuels. For those who are striving to lead in the ESG space, this pledge and transition toward becoming fossil fuel free reinforces their commitment to a low-carbon and environmentally sustainable future.
It is important to note the differences between the terms ‘fossil fuel free’ and ‘low-carbon’. Low carbon is a commonly used marketing term and is not interchangeable with the term fossil fuel free. It is possible for a fund to hold investments in coal, oil, and gas and still refer to itself as ‘low carbon’.
Both fossil fuel free and low carbon strategies are opportunities for investors to make an impact with their dollars for a future less dependent on nonrenewable energies.
Impact Investing with WCG
At WCG, we believe in the importance of social and sustainable investing. We believe in investing alongside our values and we support the allocation of conscious capital. In our High Impact Portfolios, we utilize ESG screens to pursue our dual objective of providing competitive returns as well as making a positive impact on society and the environment.
This material is for general information only and is not intended to provide specific advice or recommendations for any individual.
An Environmental, Social and Governance (ESG) fund’s policy could cause it to perform differently compared to funds that do not have such a policy.
“Parnassus Investments Adopts a Firmwide Fossil Fuel Free Policy” Parnassus Investments, 16 Sept. 2019.
“What does it mean to invest fossil fuel free?” Green Century Funds, 20 Sept. 2018.