Managing Climate Change Risk, Including Fossil Fuel Free Portfolios
Walden recognizes the urgent need to respond and adapt to climate change, which is a threat to global public health and the environment. Walden integrates climate change risk in portfolio management in a holistic manner – addressing the supply side (fossil fuel and related companies) as well as the demand side (all other portfolio companies as energy users). Walden considers climate change risk in company selection, corporate engagement activities, and public policy advocacy. For more information on our approach, see "Investing to Reduce Returns - Of CO2" from the Summer 2013 edition of Walden's newsletter, Values.
For well over a decade Walden has raised the issue of climate change risk with a broad range of companies, including some of the biggest energy companies in the industry. These dialogues continue, and today we are asking companies to take specific, measurable steps to disclose their approach to addressing climate change. We also ask companies to ensure that their public policy advocacy supports forward-looking 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).
Walden also has clients who have determined that they will exclude investment in fossil fuel companies altogether. Walden has over twenty years of experience managing portfolios for clients without exposure to coal, natural gas, and oil companies. The decision to exclude exposure to fossil fuel companies is multi-faceted and complex. Walden believes such a decision deserves thoughtful deliberation, and we work closely with our clients to create a suitable investment approach.
Both engagement and divestment of fossil fuel companies are effective tools that raise awareness of the climate change crisis. Walden is pleased and supportive of the increased visibility and energy the divestment movement brings. Walden also believes that effective engagement and public policy advocacy – two areas in which Walden has demonstrated unique expertise – can help accomplish the goal of raising public consciousness to promote substantial action on climate change.