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Retirement

Finally, Your Investments Can Reflect Your Values

So, you are over 50 and you’ve done okay, maybe even better than okay. You’ve saved some money for a rainy day and invested the rest wisely. You may have followed the recommendations of a trusted broker or decided to manage your own portfolio. Most of your money is probably in some type of retirement account where it is growing reliably, despite the ups and downs of the past 30 years.  

Also, at this point in your life you probably have some strong opinions about the state of the world and firm, fixed values about what is right and what is wrong. Your charitable giving track record reflects those values, but what about your portfolio? Do you even know what is in your portfolio? Here are some examples of people who did not:

  • Darren’s mother died of lung cancer at 54. Darren has been giving money to the American Cancer Society and several cancer research groups ever since her death. Recently, Darren asked his broker for a list of the companies in the mutual fund in his portfolio and discovered it contained Imperial Brands, one of the largest tobacco producers in the world.
  • Carolyn has been donating to animal rights organizations ever since she was in her 20s.  She recently discovered that her portfolio contained Shin Nippon Biomedical Laboratories, a contract testing company that carries out most of its studies on live animals.
  • Jan is a scientist whose career has focused on studying climate change.  She believes strongly that it will take social and personal responsibility to slow the warming trend she sees in her work. When she reviewed her portfolio last year with her financial advisor, she discovered that her portfolio contained PepsiCo

    PEP
    , one of the worst ocean polluters in the world.    

If these stories grab you and you want to check out your own stock portfolio for similar shockers, you should be able to access information on the content of your portfolio quite easily through your broker or by looking closely at the makeup of the mutual funds or ETFs you currently hold. Once you know what your money is doing and who you are supporting, you can check out individual companies by looking at their track record on the issues you care about. 

In the 21stcentury, a large concern for many people is the environment and who is polluting it and contributing to climate change. CDP is a non-profit that runs a global disclosure system for investors, companies, cities and states. Designed to help them track and manage their environmental impact, companies self-report in an effort to be ranked and to improve on a number of important measures. If a company is represented in CDP’s database, you can be assured it is trying to do the right thing. Looking at it from the other side, finding information about gross polluters is easy as well. Most major media outlets go after the bad guys, since it generates better headlines. Check out a few of the following:

MORE FOR YOU

  • In 2019, The Guardian revealed the 20 firms behind a third of all carbon emissions.
  • In 2020, Forbes.com writer, Niall McCarthy mined the recent reports published by The Changing Markets Foundation to expose the world’s worst companies for plastic waste pollution.
  • In 2020, both EcoWatch and FastCompany reported on the world’s worst plastic polluters, many of whom had made zero progress in cleaning up their act.  Their information came from a report compiled by Break Free From Plastic, a group of around 2000 NGOs that monitor and expose plastic waste by the largest companies in the world. 
  • In 2016, Money Inc. produced a report on five huge companies known for horrific working conditions. 

If animal rights issues are a concern for you, PETA compiles reports on companies that are the worst for inhumane treatment of animals used in research.

Regardless of which issues concern you the most, a good search engine will help you separate the good guys from the bad guys. If you determine you want to make some changes in your investing strategy at this time in life, you may want to check out some of the funds that are specifically constructed for socially responsible investing (SRI). These funds are commonly known in the investment community as ESGs, which means they contain companies whose record on the environment, social responsibility, and governance is clean and headed in the right direction. Earlier this month, Kiplinger provided their view on 15 of the best ones to hold for 2021. They include:

  • Vanguard FTSE Social Index Fund Admiral
  • Shares MSCI Global Impact ETF
  • iShares Global Clean Energy ETF
  • SPDR S&P 500 Fossil Fuel Reserves Free ETF
  • Pax Elevate Global Women’s Leadership Fund
  • Nuveen ESG Small-Cap ETF
  • TIAA-CREF Core Impact Bond Fund

One new player in the socially responsible investment space is CoPeace.  They are not a fund; rather they are an investment holding company (like Warren Buffet’s Berkshire Hathaway

BRK.B
). As a holding company, they act as an umbrella entity that holds stock in companies they hand select. An investment in CoPeace helps to provide long-term support to their holdings for economic growth. They describe their investing strategy as HEAD+HEART+MATH. They identify companies with innovative, marketable concepts and a strong leadership team. They target companies that are combating world problems with measurable impact, and they analyze potential investments using a series of economic models and financial projections designed to identify potential for positive growth and targeted returns. 

CoPeace was founded by entrepreneur, Craig Jonas. A life-long advocate of social responsibility and social justice, Dr. Jonas has seen clear evidence that social responsibility and business can be great partners and produce a better world for employees, investors and the planet. CoPeace is small and nimble, with five full-time employees, nine contractors, and 20 advisors. They made a commitment from the outset to have a board composition of at least 50% women and they have a strong track record investing in businesses owned by people of color. 

Only a few years ago, ESG investing was thought of as a boutique approach to investing, which came at the expense of growth and returns. Since 2018, however, these investment strategies have demonstrated they can beat the market. That means investors like you and me no longer have to sacrifice market-rate returns in order to follow our hearts. No matter where you have put your money in the past, you now have healthy choices for putting your money to work, while also making a contribution to the health of the planet and the welfare of humanity.

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