“Today, the majority of our savings leave the local community, with the general exception of businesses we own directly. While we may sometimes avoid shopping at big-box stores that work to out-compete our local independent favorites, our savings, our retirement accounts, and our mutual funds often directly underwrite the growth and expansion of these mega-corporates. While we likely want more financing to be available for local businesses, sustainable innovations, and community infrastructure, our investments often speak otherwise. But it doesn’t have to be this way. The cornerstone in this context is the integration of sustainability criteria into investment decisions.
Many investors are becoming aware of the risks associated with holding fossil fuel companies in their portfolios and transitioning their investments away from the industry. Climate change costs the global economy $1.2 trillion annually and is expected to dramatically increase over the next few decades. Evidence indicates that a sustainable investment lens can lead to better, risk-adjusted financial returns. However, only a fraction of investors include these factors in their investment and decision-making process. In the mainstream investment community, there is a general lack of awareness of ESG issues as well as a disproportionate focus on short-term performance.
Capital markets can play a fundamental role in fostering business ethics and sustainable development. As the fossil fuel divestment movement gathers global momentum, many individuals and organizations find themselves reevaluating where and how to invest. There is growing concern within the investment community that the externalities of climate change are becoming increasingly financially material. Trillium Asset Management, uses divestment principles in their strategy to identify companies best positioned to deliver strong, long-term performance. Our management principles and resources, such as our ‘Guide to Personal Divestment and Reinvestment‘, help individuals better understand divestment and provide clear steps to transitioning investments away from fossil fuel activities.”
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