A Registered Investment Advisor

It turns out that there is a downside to the rapid growth seen in the Socially Responsible Investment arena, being able to clearly define what SRI means. If your intent is to own companies that are completely Fossil Fuel Free, you will want to check out this website/tool: (FossilFree-Funds). You can also find the link on our company site under the Resources Tab and Useful Websites.

We found some very surprising results when searching popular “Sustainable” funds through this tool. It gives investors the ability to compare fossil free investments and the carbon footprint of companies within the mutual funds and ETFs that they own. Vanguard’s attempt at a Social Index Fund falls short of most investor’s standards regarding their desire to affect the environment in a sustainable manner. The Vanguard FTSE Social Index Fund (VFTSX) only receives 1 of 5 badges and has over 4% representing over 240 million of its holdings in fossil fuel investments including companies like ConocoPhillips, Phillips 66, Kinder Morgan Inc., and Occidental Petroleum.

SPYX is State Street’s S&P 500 Fossil Fuel Reserve Free ETF has over 6% of its holdings in fossil fuel companies! This is nearly 23 million dollars and includes companies like Duke Energy and Southern Co. Now if you are buying the ETF strictly on the basis of avoiding the Coal industry or the Carbon Underground 200 (the Top 200 owners of coal and oil/gas reserves), the website shows that the fund is accomplishing this. The State Street fund, which carries a sustainability mandate, only receives only 2 of 5 badges from the FFF tool.

Compare these funds to the NASDAQ® Clean Edge® Green Energy IndexSM (QCLN) which owns zero fossil fuel companies and is given 5 out of 5 fossil free badges.

The Fossil Free Funds website is a project of As You Sow, a non-profit dedicated to shareholder advocacy. Its mission is to promote environmental and social corporate responsibility through shareholder advocacy, coalition building and innovative legal strategies. You can learn more here (As You Sow) about the important work it is accomplishing.

Jack Schniepp is a CERTIFIED FINANCIAL PLANNER™ (CFP®, ChFC®) and the owner of Cascade Financial Strategies in Bend, Oregon. CFS is a registered investment advisor licensed in Oregon, California and Idaho. They specialize in socially responsible investing which integrates environmental, social, and corporate governance (ESG) criteria into portfolio construction.

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