The people who seek ethical investment funds are often strong supporters of climate change solutions, and are well aware that fossil fuels are a major contributor to the climate crisis. Fossil fuel use is the world’s primary source of carbon dioxide, which accounts for 65% of all global greenhouse gas emissions.
There are many ways you may be reducing your ties to the fossil fuel industry – but to gain greater independence you also need to consider your investments.
Unfortunately, our major banks are still investing billions of dollars in the fossil fuel industry. Since 2015, New Zealand’s major banks have loaned over $21 billion to fossil fuel projects in Aotearoa and offshore. The vast majority of investment portfolios, still include shares in companies that extract, refine and supply fossil fuels.
We recognise it is crucial that we all do what we can to combat climate change, which is why we offer fossil fuel free investment portfolios. The following video featuring Greta Thunberg and George Monbiot reinforces the need to stop funding things that destroy nature.
Thanks to naturalclimate.solutions, Greta Thunberg and George Monbiot for permission and encouragement to take and re-use this video.
All our portfolio offerings reduce exposure to companies that own, produce or supply coal, oil, and gas, and some also include positive screening for investment in sustainable industries such as clean energy.
Find out more about our responsible investments and how it works.
Fossil fuel divestment
In recent years, more institutional and individual investors are choosing to divest from investment in fossil fuels and carbon-intensive companies. By mid-2019, over 1000 institutions managing almost $8 trillion of investment funds had divested from exposure to companies that extract, refine and supply fossil fuels.
This global divestment trend is beginning to impact the reputation and power of the fossil fuel industry itself. In 2018, analysts at Goldman Sachs said the “divestment movement has been a key driver of the coal sector’s 60% de-rating over the past five years”.
Divesting your investments from fossil fuels sends a strong message that this is no longer an industry that is acceptable to be associated with.
fuel free investment returns
Divesting from funds that support oil, gas and coal producers, and fossil fuel energy companies, is about more than being a socially responsible investor. There are sound financial reasons for making fossil fuel free investments.
Research has shown that de-carbonising your investment portfolio does not result in lower returns.
In fact, it’s possible that fossil fuel companies are currently overvalued – and their shareholders could lose significant value as carbon emissions are increasingly constrained by regulations designed to curb climate change and the use of fossil fuels.
When emissions are constrained, fossil fuel companies are at risk of owning stranded assets that have little value as the world moves to reduce its reliance on fossil fuels. The Bank of England has warned that climate change could wipe up to $US4 trillion off the value of fossil fuel assets.
to invest in fossil fuel free funds
Fossil fuel free investment funds can help give investors independence from carbon-intensive fossil fuel industries.
Fossil fuel divestment has impact: It is a meaningful way to take collective action against climate change, decreasing the power and influence of the coal, oil and gas sectors.
Divesting from fossil fuels into less harmful investments is investing in the future rather than the past.