Avoid investing in fossil fuels
The Quaker Britain Yearly Meeting’s Investment Committee announced last year that they wanted to avoid investing in fossil fuels. Many organisations are following suit, including the Rockerfeller Brother Fund, Church of Sweden along with the Bright Now campaign, run by the Christian charity Operation Noah, which encourages churches to become fossil-free. This has led to much heated debate around the topic in the ethical investment world. The reality is that it is hard to disinvest 100% from all fossil fuels in a balanced portfolio, not only because performance may suffer but also because of the complex issues involved. Although ethical funds will screen out most oil and coal companies on ethical grounds, some gas companies are deemed acceptable on a ‘best of sector basis’.
This is to ensure that a portfolio has a strong enough financial dimension so that it will not underperform, compared to a non screened portfolio, but also because most fund managers see gas as a transition fuel towards a low carbon economy. Although gas is certainly the cleanest of the fossil fuels, it is not without its issues, not least of which is fracking. There are other issues to consider – one of which is if you are looking to support renewable energy, many energy companies involved in this area are also involved in traditional fossil fuels. Although avoiding fossil fuels 100% from an ‘off the shelf’ ethically screened fund will be difficult for the reasons stated above, it is still achievable. Please contact us to discuss further.
