Managing Climate Change Risk, Including
Fossil Fuel Free Portfolios
The enormous impact of climate change on global public health and the environment demands an urgent, multifaceted response. Walden understands that investors can be a positive force for action on climate change through their capital allocation decisions as well as engagement activities. We also recognize the complexity of the decision to divest of fossil fuel companies, or alternatively, to remain invested and engage with them. We believe such a decision deserves thoughtful deliberation, and we work closely with our clients to create a suitable investment approach that reflects their unique perspective and objectives.
For all client portfolios, Walden integrates climate change risk in portfolio management in a holistic manner – addressing the supply side (fossil fuel and related companies when held) as well as the demand side (all other portfolio companies as energy users). Walden considers climate change risk in company selection, shareholder engagement activities, and public policy advocacy. See"Investing to Reduce Returns - Of CO2" from the Summer 2013 edition of Walden's newsletter, Values.
For clients who have determined that they will exclude investment in fossil fuel companies altogether, Walden has over twenty years’ experience managing portfolios without exposure to coal, natural gas and oil companies. We have Balanced and Equity strategies that do not invest in companies whose primary business is to explore, develop, produce, refine, service, or transport by pipeline any fossil fuel resources, including coal, oil and natural gas. Our track record demonstrates that clients can achieve competitive risk-adjusted returns over full market cycles with this approach.
Walden also works with clients who view engagement and public policy advocacy – two areas in which Walden has demonstrated unique expertise – as effective tools to promote substantial action on climate change.
For well over a decade Walden has raised the issue of climate change risk with a broad range of companies through dialogues and shareholder resolutions, including some of the biggest energy companies. These engagements continue, and today we are asking companies to take specific, measurable steps to reduce greenhouse gas emissions and invest in renewable energy. We also ask companies to ensure that their public policy advocacy supports effective legislation and regulation combatting climate change. For more information on our work on this topic, see the following articles from our Values newsletter: "Tipping Points" (Summer 2014) and "Catalyzing a Climate of Change" (Winter 2013).
Both strategies – divestment and engagement – elevate the visibility of the climate change crisis and provide impetus for long overdue action on the public policy front. Walden would be pleased to assist you in understanding the options available and developing a plan of action that is right for you.