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Fossil fuels added nothing to investment returns over past 40 years

Credible new evidence has surfaced that there’s no financial penalty for investing Fossil Free.

In a just-released white paper, Dimensional Fund Advisors finds that since 1975 the exclusion of all energy and utilities companies* from an equity market index portfolio did not have any material impact on average returns or volatility.

The same is true in developed markets outside of the US (since 1990) and emerging markets (since 1995).

What does this mean?

Since there’s no reason to believe the next 40 years will be better than the past 40 years for fossil fuel investments, there’s no longer even a financial justification for holding Exxon Mobil and other major contributors to global warming in your investment portfolio. As climate change effects intensify, downside risks of such carbon-intensive assets may even escalate.
 

Read Full Report
 

Dimensional’s report is a bit technical but worth reading. (You can read our non-technical synopsis here.)

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* Energy and utilities companies are where the largest potential or actual emissions of climate-warming greenhouse gases tend to be concentrated. Macroclimate overweights the most sustainable companies in these sectors — and excludes the rest.
 

Macroclimate partners with Fossil Free Funds to expose hidden investments in coal power plants

Macroclimate® and Fossil Free Funds have combined forces to expose climate-killing investments in coal-fired power plants that are embedded in nearly everyone’s retirement portfolio. This new addition to the popular Fossil Free Funds website enables any investor, from large institutional to individual, to better measure the climate risk of their investments — free of charge.

 
Press Release
 
Blog Post

 

“Good” Trumps Fear

B Corps lead a growing global movement of people using business as a force for good.

That’s why we’re very pleased to announce that Macroclimate is now a Certified B Corporation — having achieved an “exceptional” final score of 146 points (only 80 points are needed for certification).

There are two principal reasons why we scored so highly:

  • We built a more sustainable — and higher performance — way to invest
  • We leverage our success by donating 5% or more of our annual revenues to environmental research and climate action

In these troubled times, now’s the perfect moment to get on board with the Best for the World movement — and Macroclimate. Here’s how:

1) Assess the carbon exposure of your personal investments and consider excluding carbon-intensive assets like coal-fired power plants and Exxon Mobil.

2) Explain to those you know how their investment behavior – like their consumer behavior – can help to reduce climate risk. And, with Macroclimate, long-term investors need not sacrifice expected returns to do so.

 
 

Macroclimate now “Deforestation Free”

Palm oil production is the fastest growing cause of rainforest destruction and rainforest destruction is the second biggest driver of climate change after the burning of fossil fuels. That’s why we’ve worked with Friends of the Earth and Dimensional Fund Advisors to make it easy for everyday investors like you to eliminate these major climate stressors from your investment portfolio.

Read the full story — including the role Macroclimate® played in pushing palm oil divestment into the mainstream.

 
Full Story

 

Photo credit: Hayden