Great news for Quaker investors! Friends Fiduciary Corporation (FFC) has announced a new Fossil Free Fund.
Friends are called to be patterns and examples. Many Friends experience a moral incongruity owning companies that knowingly continue to cause global warming for profit.
In a recent communication, FFC shared, “We are aware that there is a range of opinions on the divestment issue and that these views may continue to change over time. Because Friends Fiduciary wants to be able to serve all Friends’ meetings, churches, schools, and organizations, including those that may reach a different decision on this issue [preferring low carbon investments], we are developing a new investment pool that constituents may opt into that will exclude fossil fuel investments consistent with 350.org’s divestment goal (the Carbon Tracker Top 200 Fossil Fuel Companies). The fund will adhere to FFC’s Quaker investing guidelines and our active shareholder advocacy work will include the companies in this fund. In addition to the fossil fuel screen, the fund will maintain an allocation to alternative/sustainable energy investments.”
Quaker investors will be glad to learn that research suggests minimal or no risk for divestment to investment portfolios. Aperio Group reported on two studies to analyze the impact of divesting from: (1) the Filthy Fifteen, a group of coal utility and extraction companies designated by the coal divestment campaign as the dirtiest public companies to hold; and (2) the exclusion of the entire industry of Oil, Gas, and Consumable Fuels. They found that, “The portfolio becomes riskier by such a trivial amount that the impact is statistically irrelevant. In other words, excluding the Filthy Fifteen [worst companies] has no real impact on risk,” Geddes says. “The impact of screening for coal and carbon is far less significant than skeptics often presume. Anyone on an endowment board facing that decision should do the investment math.” You can read the full Aperio Group report at http://www.aperiogroup.com/system/files/documents/building_a_carbon_free_portfolio.pdf.
In May 2013, the Associated Press commissioned a study based on the returns of the S&P 500. They found that an endowment of $1 billion that excluded fossil-fuel companies would have grown to $2.26 billion over the past decade, while an endowment that included these investments would have grown to $2.14 billion.
Within the last six months, FFC has excluded coal companies and the utility companies related to coal. They have also sold their interests in Exxon, Chevron, and ConocoPhillips. FFC is committed to continuing their shareholder advocacy for any fossil fuel companies that they continue to own within the Consolidated Fund.
The new Fossil Free Fund will be available in January 2014. Interested Meetings and organizations should contact Friend Fiduciary at (215) 241-7272 or by email at firstname.lastname@example.org.