This article was published in a recent newsletter by TIAA-Divest, a volunteer organization that is working to encourage TIAA to divest from fossil fuels and deforestation. We would like to thank the many TIAA financial professionals who, along with their clients, have selected Green Century as part of their fossil fuel-free investment portfolios. Please note that Green Century is not affiliated with TIAA or TIAA-Divest.
What is unique about Green Century is its ownership. Founded in 1991 by nine Public Interest Research Groups (PIRGS)—consumer advocacy organizations that push for companies to be safer, healthier, more transparent and more sustainable—it is the only mutual fund company owned entirely by health and environmental nonprofits.
“The idea,” Leslie explains, “was to give members a place to invest their values and to generate revenue for their campaigns.” Green Century’s profits still go to the PIRGS. Leslie was an economics major in college and thought she wanted to be a stockbroker, but she didn’t want to be in traditional financial services. “So, I went and I worked for the PIRGs.”
Why Choose Sustainable Investments Fossil Fuel Free
While there are strong moral and ethical reasons to move your money, Leslie argues that there are financial reasons to consider as well. “The fossil fuel industry has been the most volatile sector of the market. And so sometimes when people think about being comfortable with investments, one of the things they’re looking to avoid is sort of this up and down.” It’s also wise to consider the risk of fossil fuel stocks becoming “stranded assets.” That is, if a government outlaws coal, you don’t want to have your money tied up in a coal mine that’s worth nothing because it’s no longer in use.
Green Century is Fossil Fuel Free
All of Green Century’s funds exclude coal, oil and gas, weapons (both conventional and military), nuclear energy, GMOs, mining, and pesticides. Leslie explains that these exclusions are written into the prospectus for each fund, and so are legally binding. “To really understand what is and isn’t in your fund, you need to have you, or your financial advisor, take a quick look at the prospectus and pay attention to the part about exclusions. Ours are written in there, black and white, so everyone can read them.”
Other firms typically describe their principles in general terms, but the specifics matter. Sometimes funds that have been environmentally responsible in the past, for example, have snuck fracked gas or weapons back into the fund later—and they are free to do so unless their prospectus explicitly prohibits it.
Green Century’s Active Shareholder Advocacy Program
Leslie is also proud of Green Century’s shareholder advocacy program. Many other firms use their proxy power to vote for environmentally responsible shareholder resolutions—agreeing that the company should make a net-zero emissions pledge, for example. But Green Century works to put those resolutions on the ballot in the first place. And they spend time talking to companies, urging them to adopt carbon emissions goals and create specific transition plans.
Among their successes are urging Costco to reduce plastic usage, pushing Conagra Brands, which includes Orville Redenbacher’s, Duncan Hines, and Slim Jim, to protect ecosystems such as the Cerrado in Brazil, and persuading J.M. Smucker to reduce deforestation in its supply chain. Green Century also focuses on ensuring that the companies implement these changes.
“What gets the headlines is the wins,” Leslie said. “But we follow up with the companies through the years to make sure that they’re on track and are going to do what they have committed to do.”
The company has taken this shareholder strategy to banks rather than divesting from fossil finance, and they have had some successes. JP Morgan Chase and Bank of America recently strengthened their forest protections thanks to shareholder pressure led by Green Century. Leslie says that they have filed more environmental proposals of any firm in the last four years.
The minimum investment in a Green Century fund is $2,500. For more information, call Green Century (1-800-934-7336) or download the Sustainable Investment Guide.