Climate-Aware Fund Investing
Three ways to incorporate climate concerns into your large-cap funds portfolio.
The 2016 election may have a galvanizing effect on climate-aware investing, given the new president’s stated doubts about climate change, push for environmental deregulation, and support for the fossil-fuel industry, especially coal. Most energy and utilities companies will continue their move away from fossil fuels and toward alternative energy because it increasingly makes economic sense to do so. Large companies throughout the global economy will continue to take steps to lower their carbon footprints, and regulators, stakeholders, and investors will continue to support the transition to a low-carbon economy. In the aftermath of the election, it’s not hard to imagine investors redoubling their commitment to investing in ways that take climate change into account.
There are several ways fund investors can do this. The most prominent is to get rid of funds with exposure to fossil fuels. Fossil-free funds generally exclude companies that own oil, natural gas, and coal reserves. Some fossil-free funds may also exclude companies involved in the refining and transport of fossil fuels, suppliers of oilfield equipment, and utilities that rely heavily on nonrenewable energy for their power generation.
Jon Hale does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.