As a foundation director, you’re focused on the impact you can make with your foundation’s dollars. You work hard to select recipients who have both the greatest need and the most potential for successful implementation (AKA, the highest possible impact).
The trend of divesting from fossil fuels and turning to clean energy investments instead has certainly grown in recent years. As these investments originated from concern for the environment rather than traditional financial return objectives, serious investors may wonder if these investments that are “benefitting society” still earn the same level of return on investment.
It is an exciting time to be involved in solar! Given our exposure to both solar development and installation, we are often asked about broad trends we see in the industry. A new year offers a great opportunity to reflect on
A few years ago, as the economy was struggling to recover from the Great Recession, I found myself talking to a friend who works for a large investment management firm. We covered a range of topics from politics to the housing market to Wall Street and the recovering economy.
While we shared concerns that the slow recovery was creating a lot of stress for those looking for work, I expressed hope that a silver lining might be a move to divest from harmful industries like coal and oil due to reduced demand.
At the mention of divestment, my friend, an investment manager, blurted out “Then what should I tell people to invest in?!” While I would hardly suggest I predicted the future, I told him I thought the answer was to invest in clean energy.
Recently, it seems that investment in renewables is not just a smart choice financially--given the impending concern that hovers over the coal industry--but it’s also a bet in favor of our well being and that of our children. It represents impact investing in every sense of that term.
It turns out, I was ahead of the curve.
This recent summary from Arabella Advisors illustrates the speed and scale that investors are fleeing traditional fossil fuel investments.
“To date, 436 institutions and 2,040 individuals across 43 countries and representing $2.6
trillion in assets have committed to divest from fossil fuel companies. The divestment
movement has grown exponentially since Climate Week in September 2014, when Arabella
Advisors last reported that 181 institutions and 656 individuals representing over $50 billion
in assets had committed to divest. At that time, divestment advocates pledged to triple these
numbers by the December 2015 Paris UN climate negotiations. Three months before the
negotiations, we have already witnessed a fifty-fold increase in the total combined assets of
those committed to divest from fossil fuels.”
So in one year, between 2014 and 2015, 255 institutions have committed to divest an additional $2.55 trillion of their holdings in fossil fuels.
This isn’t just because of public backlash in response to a changing climate; companies like HSBC have warned that those investments could lose up to 60% in equity value if international agreements like those proposed at COP21 last week are met.
If you’re a serious investor, you have input in the types of funds your money goes into. You’re almost certainly investing your money in some kind of energy, so why not stay ahead of the game and actively choose an investment portfolio that includes the promise of renewable energy? You can even take it a step further and put your investment dollars to use though Sunvestment Energy Group’s online investment platform, where you can choose an impact investment that truly means something to you.
In a recent blog post introducing #GivingTuesday we introduced the concept of a Solar Champion, that community member who is passionate about renewable energy and who can rally your supporters around a fundraising effort to bring solar to your organization. In addition to providing an effective way to make renewable energy affordable, a Solar Champion-led effort can offer an outlet for creativity and an opportunity to express the spirit of your organization.