Sustainable investing, Green New Deal workshop, and big oil
I’ve got a few things for you this week:
- New video & podcast on sustainable investing
- Upcoming Green New Deal workshop organized by some awesome grandmothers
- Big oil: Some good & bad news
But first, a huge thank you to everyone who donated after reading last week’s newsletter! We’re now up over $10,100 in raised funds for Crowdsourcing Sustainability‘s $78,198 2021 budget – making progress!
Sustainable Investing with Ian Monroe
I recently had the pleasure of interviewing Ian Monroe who is the Founder of Etho Capital. We discussed sustainable investing, ESGs, greenwashing, divesting vs. engaging with fossil fuel companies, what the average person’s investments look like through a sustainability lens, and much more.
Ian’s pathway into the financial world is unique as he’s really a climate guy. Prior to Etho, Ian consulted on sustainable solutions in over 30 countries for nonprofits, the UN, the World Bank, and the US Department of State. He’s also a professor at Stanford in the Earth Systems Program, and founded Oroeco which is an app that helps individuals reverse climate change.
It was through working on this app that he discovered that, on average, the climate-friendlier companies were delivering better financial returns for investors than their less efficient peers.
When he realized this, he decided to create the world’s most sustainable investment options to get as much money as possible flowing in the right direction – towards climate solutions. And so, Etho Capital was born.
Their ETF (exchange traded fund), “ETHO” has outperformed the S&P 500 over the last 5 years while being 84% cleaner than it.
I thoroughly enjoyed our wide-ranging conversation and hope you do as well 🙂
- Companies that are climate leaders tend to be better investments in every sector.
- There’s lots of greenwashing in the ESG (Environmental, social, governance) investing space. Many funds say they’re green but still hold fossil fuels. Make sure to double-check!
- Scope 3 emissions, which usually account for over 80% of a company’s greenhouse gas emissions, are ignored by nearly all ESG funds today.
- The vast majority of fossil fuel resources currently underground cannot be burned. But they remain on balance sheets and are still valued in the market.
- Portfolio managers not divesting from fossil fuels may be breaking their fiduciary duty to their clients.
- The average person with investments has about 5% to 7% of their money in fossil fuels.
- Net zero by 2050 is not fast enough.
- Ian’s advice to companies and employees: check out Climate Neutral to help track your company’s carbon footprint, reduce it as much as possible (key that this is first!), and then offset the rest.
Topics & Timeline:
2:20 When Ian started working on climate and why
5:45 Career before Etho Capital
9:25 Etho Capital’s mission and how it works
12:25 History of sustainable investing and why climate leading companies are better Investments today
21:30 Deep dive on ESG’s
29:45 Specific orgs/funds doing great work in this space
32:45 How to look at a company’s full climate story. Scope 1, 2, and 3 emissions explained and why it’s a major problem that 99% of funds ignore scope 3
39:15 Are financial investors breaking their fiduciary duty at this point by staying invested in fossil fuels?
43:15 Net zero by 2050 is too late
46:45 Divesting vs engaging with fossil fuel companies
47:30 Stories of fossil fuel companies behind the scenes and their greenwashing
55:30 The carbon bubble
100:30 What advice do you have for people who want to align Investments with values/get out of fossil fuels?
1:06:40 What needs to change in the financial world and how do we make that happen?
1:19:50 What advice do you have for employees and their companies to accelerate their climate action?
1:24:25 The devil is in the details when it comes to net zero and offsets…are companies reducing all the emissions they can first? Are offsets additional?
1:29:20 Ian’s final message for folks
Some of Ian’s particularly memorable lines from the interview:
“Right now conventional index funds are effectively creating a zombie flow of capital towards fossil fuel companies and other companies connected to climate and sustainability problems.”
“We’re actually long past the point where any portfolio manager, particularly those that have a fiduciary duty to manage a public pension for example…if they’re not looking to divest from fossil fuels as quickly as they can at this point I think there’s a very strong argument that they’re in violation of their fiduciary duty.”
“If you look at the climate science, as I talk about with my students at Stanford, [net zero by 2050 is] really not soon enough. We really need to be talking about net zero by 2040 – ideally 2030. And for those that can afford to do so, which a whole lot of the large investors certainly can, we need to be looking at effectively net zero now and even getting to net positive. That’s just a shift in mindset and a shift in urgency that really still needs to happen.”
Upcoming Green New Deal Workshop
Claire Schoen has been reading the CS newsletter ever since I interviewed her about her work on climate and the awesome Stepping Up podcast mini-series.
Most recently she helped launch a small group called Grandmothers 4 a Green New Deal. They are a group of elder women working toward a just transition to a sustainable world and have been organizing workshops to educate folks on what the Green New Deal actually is and why it matters (something mainstream media has largely failed to do).
These wonderful grandmothers are now organizing an event specifically for people in our Crowdsourcing Sustainability community. It’ll be from 6 to 7:30 EST on Wednesday, June 23rd.
So if you’d like to learn more about the Green New Deal and how to get climate solutions enacted, sign up here to claim a spot at the workshop!
(And for those who aren’t able to attend, you can check out their 17-minute video on the Green New Deal called A Path Forward!)
For what it’s worth, I think the Green New Deal has led to an incredibly important shift in how many think about climate action – from thinking about it as a cost or a sacrifice to seeing it as something that can help solve multiple pressing, interconnected issues at once and make your life better.
Some bad news for life on earth
Mere days after the International Energy Agency announced that governments need to stop investing in new fossil fuel projects starting now, the Biden administration gave the green light to build a new oil drilling project and pipelines in Alaska. Over its (supposed) lifetime, the project will produce emissions equivalent to that of 66 coal plants.
Some good news for life on earth
(I wrote this before receiving Emily Atkin’s latest newsletter that has an extremely similar title…and it’s late so I’m leaving it!)
Hard to overstate how much Big Oil is getting its ass kicked today by courts and shareholders alike.
🔥Shell loses massive trial
🛢Chevron shareholders want to limit Scope 3 emissions
⛽️Exxon expecting at least two new climate activist board members
— Brian Kahn (@blkahn) May 26, 2021
“The court understands that the consequences could be big for Shell. But the court believes that the consequences of severe climate change are more important than Shell’s interests…Severe climate change has consequences for human rights, including the right to life. And the court thinks that companies, among them Shell, have to respect those human rights,” – Judge Jeannette Honée
“It’s clear that the arguments that many have been making for a decade have sunk in at the highest levels: there is no actual way to evade the inexorable mathematics of climate change. If you want to keep the temperature low enough that civilization will survive, you have to keep coal and oil and gas in the ground. That sounded radical a decade ago. Now it sounds like the law.” – Bill McKibben