We’ve had a year of it. 2020 put us literally between a rock and a hard place. The rock was the Zoom screen. Inescapable, tedious, yet so present. And the hard place? Everywhere. We’ve watched a nation entail itself with masked discord in the streets and numbing isolation.
But all the agitation of 2020 also brought a lot of truth to the surface. Issues that had long smoldered under the surface exploded and drove us to action. With social injustice, wildfires, chaotic politics, and job loss, very real concern for our future has taken precedence over all the usual concerns. We have lost track of things like saving money, learning how to invest and planning for our long term, positive financial future.
Worrying about the planet and worrying about ourselves shouldn’t be at odds. In fact, they should go hand in hand and now, the desire to make money through investing and the desire to make a difference should both be part of your financial planning.
Part of the reason UnifyImpact exists is to help you get back to the future. In other words, to help you get back to making choices that help you plan for the life you want to live.
Understanding Your Footprint
The first step in looking forward is understanding where you are right now.
Investing apps and robo-advisors that automatically invest and manage your money have grown popular in recent years. About 30% of millennials who say they invest use a robo-advisor to do so, according to our recent survey of U.S. adults 18 to 35. And if you have a 401K, someone’s investing for you. In both cases it is totally possible to remain unaware of how your investments align with your values? What is any company’s full impact on society?
Investors who hold strong social views, don’t always know what companies they’re investing in. And if they’re not paying close attention, it is nearly inevitable that their money will be invested in companies that go against their values. Just because the value of a company seems to be growing, doesn’t mean it has a good track record on issues like gender equity or supply chain management.
What’s more, passive investment products, like thematic ETFs, can lull you into thinking you’re investing in companies that are making a positive impact on the world when you’re actually investing in the same major corporations as everyone else. ETFs are a collection of companies with an overriding theme, such as “cannabis,” or “decarbonization,” or “clean water,” but it is rather difficult to find, let alone track the entire holdings of a given fund. Fund managers select companies which perform well in certain areas, but don’t always look at the big picture of sustainability, which is as far-reaching, and can have as broad an impact as there are issues to address.
As sustainability solutions consultancy group Maximpact.com puts it, “Investors are being put on notice that some mutual funds and exchange traded funds labeled ‘sustainable,’ ‘ecology,’ ‘green’ or ‘integrity’ may actually have very high carbon footprints.”
Given that BlackRock recently published a major report on portfolio climate risk, it may be a surprise that the BlackRock Basic Value Fund’s (MABAX) has a carbon footprint 170 percent higher than its benchmark, the Russell 1000 Value Index.
The State Street SPDR S&P 500 Fossil Fuel Reserves Free ETF (SPYX) holds 40 fossil fuel companies, including companies with reserves like Phillips66, Valero, and Marathon; coal fired utilities Duke Energy and Southern Company, and oil field services leader Halliburton.
FossilFreeFunds.org, an offshoot of As You Sow a landmark NGO dedicated to using shareholder advocacy to improve corporate responsibility adds, “Fossil fuel investments carry real financial risks.” Fossil Free Funds has added carbon footprinting of over $11 trillion in global mutual funds and ETFs to the site – the largest-ever analysis of this kind. Their analysis covers more than 8,500 global mutual funds, including 3,000 of the most commonly-held funds in U.S. retirement plans, so that all investors can be aware of the climate risk in their retirement accounts.
Getting Started With Data
Once you get past the labels and find out what companies you are investing in, the next step is to get specific.
In an interview with Motley Fool, As You Sow CEO Andrew Behar points out, “Transparency leads to transformation. Measuring a company’s carbon emissions is a critical way to understand the specific climate risk of your investments.”
He adds, “In August, Morningstar introduced a Sustainability Rating for Funds that offers an objective way to evaluate how investments are meeting environmental, social, and governance challenges, helping investors put their money where their values are.”
To explain why As You Sow built FossilFreeFunds.org, Behar said, “We have aggregated this data for all of the companies embedded in each of the 8,500 most-held global mutual funds and ETFs,” said Behar. “This tool enables every investor to answer the question, ‘Am I investing in my own destruction or the clean energy future?”
At UnifyImpact, we are all about transparency. We launched our company by sourcing data on the Environmental, Social and corporate Governance performance of 20,000 publicly traded companies, and the first thing we did was open the doors to the public. Our goal is to let individual investors, people like you or me, unpack their investment portfolios with the same rigor as whistle-blower organizations like As You Sow.
Carbon Emissions are only one kind of footprint that major corporations have. When you sign up for UnifyImpact, you get real time data organized into high-level “Impact Values”: Climate Change, Natural Resources, Wildlife & Animal Welfare, Labor, Community, Diversity, Leadership, Collaboration, and Transparency. From there you can break the data down into 51 incredibly specific performance indicators so you can personalize your data analysis to your specific interests.
We believe you deserve access to transparent data in all areas of sustainability and that you deserve to know how your investments line up with your values. Sign up here to give it a try.
Want to take it a step further than transparent data? The next step in getting back to the future is to understand how to wield your economic power. Check out our blog “Can I Make A Difference?” to get some ideas of how shareholder advocacy can be a tool to make positive change for the benefit of all stakeholders including employees, customers, communities where the company operates, ecosystems, the planet, and of course shareholders.
UnifyImpact has entered the market to democratize ESG investing for retail investors. With our app, users are able to glean insights on individual company’s ESG rankings based on personal Impact Values. This gives investors like you more confidence to make educated and purposeful mission-aligned sustainable investments. Whether investors come to UnifyImpact to investigate the holdings in their current ESG ETFs or want to double-check individual company rankings on specific impacts before purchasing stock, users will have never-before access to approachable and customized ESG rankings, information, analysis, and news.
For those looking to invest sustainably and overcome the shortcomings of passive ESG index investing, sign up for up-to-date ESG scores on 20,000 public companies giving you the confidence to align your assets with the impact values that matter to you.