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Green Century on the road

February 6, 2023

Sustainable Investing Conferences in 2022

Green Century attended a variety of sustainable investing conferences in 2022. As people got back to in-person events, event turnout increased and enthusiasm for exploring trends in sustainable investing is high. Some of the most recent conferences we attended include:

The events page of our website is frequently updated to show the rundown of past and upcoming events.

Trends in Sustainable Investing

The main themes we’ve seen discussed and presented on are greenwashing, ESG vs impact, and shareholder advocacy.

  • Greenwashing

      • What is greenwashing? Greenwashing is making false claims about how your investment protects the environment. With more mainstream firms looking to capitalize on people’s desire to align their investments with their environmental values, greenwashing has grown. Most firms don’t blatantly misrepresent their product since there are regulatory rules and fines involved, but their marketing claims can be confusing and imply more value alignment or impact than it actually offers. To avoid greenwashed products, financial advisors and investors need to look under the hood of a product and firm and understand that there is a difference between having an investment reflect your values, such as avoiding a certain industry, and making an impact on that issue in the community or world.  Some investments can do both, as the Green Century Funds do, but others may seem like they do, but don’t. Investors should ask their financial advisors or mutual fund companies how they define greenwashing, how they avoid it in products they use and how specifically they align the investment with environmental values. Lastly, don’t let the ubiquitous pretty pictures of nature fool you into investing in a greenwashed product.

  • ESG vs Impact

      • What is ESG?  ESG is an abbreviation for environmental, social, and governance factors.   ESG is simply the data or information about a company’s environmental, social and governance performance. Confusion about terms occurs because ESG is often used as a large umbrella term interchangeable with sustainable and responsible investing, though it is really just the underlying data.  
      • Some, but not all, investment managers use material or significant ESG data in their investment decisions.  This does not necessarily provide positive environmental or social impact or benefit in the real world, however, since it is difficult to trace specific investments to concrete company behavior, and the change may have occurred even without a particular investment.
      • Positive and negative screening, which includes or excludes specific industry sectors or companies from a portfolio, is often a better way to align a portfolio with clients’ values.  Screening is also often confused with ESG, and while it provides stronger alignment, it may not necessarily lead to positive impact.
      • Finally, impact can be achieved through engaging with companies to improve their ESG performance.  Such shareholder advocacy as voting proxies, filing shareholder resolutions and advocating for change can lead to companies improving their policies and practices, which can lead to real-world, concrete, measurable change. 

  • Shareholder Advocacy

    • What is shareholder advocacy? Shareholder advocacy leverages the power of stock ownership in publicly-traded companies to promote environmental, social, and governance (ESG) change from within. Through this type of advocacy, shareholders can influence a corporation’s behavior by exercising their rights as partial owners. Shareholder advocacy encompasses a variety of strategies that responsible investors can use to engage with companies in their investment portfolios on ESG issues, including dialogue with corporate executives, filing shareholder resolutions, proxy voting, participation in annual general meetings, and investor letters. 
    • Shareholder advocacy was robust from 2017 through 2020. Though it saw some decline in 2020, partly due to economic and business disruptions related to COVID-19, it’s bouncing back: large-cap companies in the United States saw a 30% increase in shareholder advocacy campaigns in early 2021 compared to the same period in 2020, and that trend looks likely to continue.
    • Not only are shareholders increasingly stepping up to advocate for environmental proposals, but more activist efforts are succeeding. Historically, businesses could generally count on these efforts failing, but that David and Goliath dynamic is slipping. Nearly 20% of the social and political shareholder proposals voted on in 2021 received majority votes, up from approximately 10% in 2020. The figure was approximately 38% for environmental proposals, compared to about 21% in 2020.

Green Centuries Key Takeaways

It was good to be back out on the road this fall. Our key takeaway from the conferences is that there is more interest in aligning environmental concerns with investment decisions than ever before, and it’s incumbent upon investment advisors to help investors separate marketing tactics from authentic products.

What is the Future of Sustainable Investing

Sustainable investing is here to stay, particularly as more companies work to reduce their impact on climate change. The conferences that we’ve recently sponsored and participated in underscore the fact that growing numbers of investors are interested in using at least a portion of their portfolio towards demanding significant change.  And as a 30+ year veteran in the field, we’re ready.

Invest Sustainably with Green Century Funds

The Green Century Funds have been helping investors align their investments with their values for more than 30 years.  As a pioneer in environmentally and sustainable investing, the Funds provide a way for investors to avoid environmentally onerous industries to create a more sustainable world. Open an account online, download forms, or  request written materials to start investing sustainably.

 

 

 

 

 

 

 

About Green Century Funds

°Green Century Capital Management, Inc. (Green Century) is the investment advisor to the Green Century Funds (The Funds). The Green Century Funds are one of the first families of fossil fuel-free, environmentally responsible mutual funds. Green Century hosts an award-winning and in-house shareholder advocacy program and is the only mutual fund company in the U.S. wholly owned by environmental and public health nonprofit organizations.

 You should carefully consider the Fund’s investment objectives, risks, charges, and expenses before investing. To obtain a Prospectus that contains this and other information about the Funds please visit www.greencentury.com, email info@greencentury.com, or call 1-800-934-7336. Please read the Prospectus carefully before investing.

 A sustainable investment strategy which incorporates environmental, social and governance criteria may result in lower or higher returns than an investment strategy that does not include such criteria.

 Stocks will fluctuate in response to factors that may affect a single company, industry, sector, country, region or the market as a whole and may perform worse than the market. Foreign securities are subject to additional risks such as currency fluctuations, regional economic and political conditions, differences in accounting methods, and other unique risks compared to investing in securities of U.S. issuers. Bonds are subject to a variety of risks including interest rate, credit, and inflation risk.

 This information has been prepared from sources believed reliable. The views expressed are as the date of this writing and are those of the Advisor to the Funds.

The Green Century Funds are distributed by UMB Distribution Services, LLC. 235 W Galena Street, Milwaukee, WI 53212. 2/23

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