174. Making our investments just a little more Earth friendly

Welcome to Progressive Pockets! I go by GG, that’s short for Genet Gimja. This is a show about our money and how we can take back our power. I don’t think billionaires are the only ones who get to decide what goes on around here. Our money has power too.

This month has been the first ever climate month over here at Progressive Pockets, and I want to thank you for listening. We’ve talked about moving your cash to a climate friendly bank, we’ve talked about dealing with climate anxiety, we talked about how to create outdoor space at your home that is sustainable but still cute. And today let’s talk about investing with the environment in mind.

Let’s talk about green investing, or eco investing or sustainable investing although sometimes people mean sustainability from a people and planet standpoint. So I’ll just call it green investing for the purposes of our discussion today.

So what is green investing and why does it matter and who even cares?

Green Investing is a way of investing that is focused on putting our money behind companies that are trying to minimize environmental damage or promote sustainability

It matters because corporations are the big polluters. It matters because as consumers we can influence the corporations. It matters because if we’re going to invest our money, it might as well be invested in ways that line up with our values.

It feels weird to go to the effort of recycling and composting and trying to turn off the water when you brush your teeth and then to turn around and invest your retirement in companies that are destroying the earth. Anybody else feel weird about that? 

The data shows that there is a big demand for socially responsible investing, among all age groups from Gen Z to the Baby Boomers and Silent Generation. You can download episode 155 which was called How Gen Z thinks about investing but actually covers all of the generations that are old enough to invest. The data is very clear that most people want to invest in ways that align with their values, not just for cut throat profits at any environmental or social cost.

So that’s what green investing is and why it matters and who even cares about it. Now how do we do it? How do we invest green?

There are a few stages to this, depending on where you are.

1. Screen out the investments from your portfolio that are the worst climate offenders.
2. Bring in investments of companies that are looking for solutions.
3. Either way, use your voice as a shareholder.

So the first step you can take is to screen out investments that you already have that are the worst climate offenders. There are websites you can use that help you get a climate scorecard on your investments without putting in any of your personal information. You don’t have to log in or give them the password to your investment app. FossilFreeFunds dot org is a great example of that.

So you can go to fossil free funds dot org and bam, right there on the landing page you see a search box and you can type in whatever you have. For example, maybe you’re an index fund type of investor, like me. Maybe you have an index fund that captures the total market, something sort of vanilla, there are so many of them, a popular one is VTSAX, the Vanguard Total Stock Market Index Fund Admiral Shares. Very vanilla. Doesn’t charge a lot of fees, easy to liquidate if you ever needed to cash out your investments for some reason, feels safe because it captures the whole market. But is it climate friendly?

Well with a tool like Fossil Free Funds dot org you can search VTSAX into the search box and within a second you get a very easy to read color coded scorecard.

What grade do you think VTSAX got? An A? B? C? Actually, it scores a D. And the reasons are listed pretty clearly under the score.

They are investing in major fossil fuel companies, the big hitters like Exxon Mobil and Chevron. They are investing in over 200 fossil fuel companies and that’s why they have scored a D on the report card.

It took less than a minute to type in the stock ticker for an investment and then look at the scorecard that pops up for it.

If you scroll down a little further you can see their scores on other things you might care about.

VTSAX has a D for fossil fuels like we talked about. 

A C for deforestation.

A C for gender equality.

A D for civilian firearms.

An F for prison industrial complex.

A D for military weapons.

And a D for tobacco.

So if you are looking to invest in a more climate friendly way, you can look up your current investments and then get a sense of a scorecard using Fossil Free Funds dot org.

You can remove the investments that aren’t aligned with your values.

But then what? The second step is to bring some investments into your portfolio that are more environmentally friendly.

You can use the same website, fossil free funds dot org to find better choices. Go to the homepage and in addition to the search box you can also see a big button that says “Top Rated Funds” and you can click on that and you can see a long list of options that are environmentally friendly. It is easy to read, also color coded, very clear, you can jot down a few investments that look like they might be worth looking into. And what I like is that you can click on the tab called Sustainability and it includes more than the score on fossil fuels, you also see the other scores we talked about like the scores for gender equality and the prison industrial complex. It’s so cool. Very easy to read and to find a starting point for funds you might want to bring into your investment portfolio.

If you invest on your own you can do some more research before you make a decision, if you have hired a financial advisor you can bring it up to their attention and they will have their own process to make sure they feel comfortable with it according to some long term goals you’ve set or the overall balance you’ve both agreed on achieving with your investment portfolio.

This may be a good time for my usual disclaimer that I’m not your financial advisor, I’m not anyone’s financial advisor. This podcast is a learn together experience, I share what I’ve learned as a civilian, as your friend who reads a lot and talks to experts, goes to conferences, follows the news. I’m your smart friend but I’m not your licensed friend. So please hire a financial advisor if you want that level of information.

So where were we?

You can use fossil free funds dot org to get a short list of investments with a clear scorecard on environmental and societal factors you might care about and then do your own further research or ask your advisor to do some further research to see if they are good options for you.

That’s more of your beginner’s level to green investing. Screening bad things out and then looking for replacements.

But I want to also mention that when you’re looking for replacements, you may also be interested in looking to invest in companies that are actively trying to solve the climate crisis. Companies that are on the cutting edge of renewable energy like the companies that are figuring out solar energy and wind energy, company that are on the cutting edge of green building materials or green agricultural technology companies. 

So the idea is that now you’re screening IN companies that are trying to help. They’re not just trying to avoid harming the earth, they are trying to find solutions that actively are helping.

And depending on the type of investor you are, you may also be ready for more advanced investing, private investments that have nothing to do with the stock market.

If you want to read a very accessible book where the author includes some stories about her first forays into this type of investing, I encourage you to take a look at a book written by Janine Firpo called Activate Your Money. She talks about mistakes she learned along the way and how you can think about getting started too. That is just a great book.

But either way, even if you are a beginner or intermediate investor I want to talk about one last way we can all invest in more environmental ways.

Our money is power, where we invest has power. Shareholders have power. And some of that power is the power to move our money to other companies that are more aligned with our values. But it’s not just the power to move our money, we also have our voices as shareholders.

When we invest, we may be asked to vote on issues that the company is making big decisions on. You’ll see an email asking you to vote your proxies, or you can ask your financial advisor to keep you informed when there’s an opportunity for you to vote.

There may be shareholder meetings that you can attend.

The point is, as a shareholder you do have a voice. So use it!

If you’ve ever greened up your investments, I’d love to hear about it, drop me a note any time at progressive pockets at gmail dot com.

So to recap, here’s what we covered today:

• Screening out the investments from your portfolio that are the worst climate offenders.
• Bringing in investments of companies that are looking for solutions.
• Either way, use your voice as a shareholder.

If you have more time today, here’s another episode to check out, that’s episode 142 Conscious Travel and Tourism, if you’re like me, you’re a little late to thinking about summer plans and vacations and so I thought this might be a good time to think about maybe there are some simple ways to incorporate more of my values into my summer plans for travel. That’s episode 142.

So this was the last episode of the climate month series, I’d love to hear your feedback about it. What did you like? Do you want to do this again here at Progressive Pockets? Any topics you’d like to submit for next time?

And as you get ready for the summer, what are you thinking about in general? Given some of the uncertainty these days, I’ve been hearing from some folks that they’re lying low this summer, not doing as much in the way of travel and vacations, or big spending in general.

I’d love to know what’s on your mind these days.

Before we go, I wanted to ask you for a favor. Could you scroll back through the episodes you’ve heard over the past several weeks and send an episode to someone you know? Podcasts are one of the few media types where there is no algorithm. You may know someone that is listening to a similar podcast and loving it and wishing there were other shows they could discover. That’s where you come in, you and your good taste in podcasts! Please share this episode with someone who might enjoy it.

Let’s end with a quote…

Arundhati Roy, 'what lies ahead? Reimagining the world. Only that.' Arundhati Roy

Let’s talk again soon!