Is Your Mutual Fund a Climate Denier?
Climate change presents a real and present threat to human civilization. It also presents tremendous risks and opportunities to the corporations in your mutual fund portfolio. How they handle these challenges may make the difference for all of us. Does your mutual fund manager agree with this, or do they deny the seriousness of the issue?
Concerned investors have been submitting shareholder proposals for years, asking corporations to report on their greenhouse gas emissions and take meaningful steps to address climate change. These proposals are put to a vote of all shareholders at each company’s annual meeting. Your mutual fund – in your 401(k), or your IRA, or your personal investment account – uses your money to buy shares in corporations and to vote on your behalf. A recent mutual fund study conducted by Ceres tracked the 39 shareholder proposals on climate change that went to vote in 2013. How did your mutual fund vote?
First, the good news. A handful of large fund managers supported climate resolutions more than 50% of the time. The largest fund managers, however, managing trillions of dollars, voted against these proposals, or sat on the sidelines by abstaining. According to Ceres, one of the largest mutual fund managers in the country has never cast a single vote in support of a climate-related resolution in the 10 years covered by the survey.
Socially responsible funds like the Domini Social Equity Fund are different. We not only vote in favor of these proposals, we also take the lead by drafting and submitting proposals, and by engaging in long-term dialogues with companies in our portfolios on climate change, deforestation and human rights. All of our investment decisions are based on considerations of environmental sustainability and universal human dignity.
In an article titled “The Coming Climate Crash”, Henry Paulson, former US Secretary of the Treasury wrote: “We’re staring down a climate bubble that poses enormous risks to both our environment and economy. The warning signs are clear and growing more urgent as the risks go unchecked.” Perhaps your fund manager believes in the reality of climate change, but doesn’t believe it will impact your investments. Isn’t this also a form of climate denial?
You wouldn’t vote for a climate denier. Why would you allow one to vote for you?
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