The world runs on them and we as a society still depend on them in direct and indirect ways. Unless someone goes completely off the grid, they are a fact of economic and social life. However, many people feel conflicted as they believe that the use of fossil fuel is too some extent harming the environment and potentially our health.

An individual or organization can reduce their dependence on these fuels directly and indirectly. Directly they are able to gauge and measure their own usage and construct a plan to reduce through various alternative ways of conducting business.

The indirect route is interesting as investors can reduce fossil fuels from their investment portfolio. It would be very difficult to eliminate them altogether as most areas of the modern economy are touched by the use of fossil fuels.

The most apparent way to begin the process is to reduce oil and gas companies from ones portfolio. If someone is invested in mutual funds or ETFs, they can begin by selling those with the highest concentration of these type of companies and replacing the allocation with a “green” alternative.

Green Century is a small fund company with a balanced and an equity fund. If your intent is to ween off of the fossil fuel theme inherent in most diversified portfolios, philosophically it may make sense to examine this company. Below is their stated goal within the funds and something to seriously contemplate as more firms and foundations divest fossil fuels.

“The Fund seeks to invest in well managed companies that are leaders and innovators, strive to maximize their environmental advantages and minimize their environmental risks. To select the stocks for investment, the portfolio managers at the sub-advisor Trillium Asset Management use rigorous financial analysis that employs a “growth at a reasonable price” discipline. The portfolio managers use similar financial and environmental criteria in selecting bonds in an effort to modulate the Fund’s overall level of investment risk and exposure to business, economic, and interest rate trends. The portfolio managers also seek to invest in green bonds that support energy efficiency and emissions reductions programs through domestic and international corporations and agencies. ”

“Green Century believes that companies that are environmentally responsible could enjoy competitive advantages including cost and liability reductions, quality improvements, profitability enhancements, and access to new and expanding growth markets. Such companies may also gain from strong relationships with their stakeholders.”

The second paragraph is very powerful if all their assertions come to fruition. As the trend continues toward growth markets in green products and as stakeholders are taken into higher consideration, Zenith believes this is an area very worth exploring as the capital markets evolve over the next twenty years and beyond.

Sincerely,

Tom Koehler-CIO

“Socially Responsible Investments represent a complex asset class and while we covered a small amount, there is a lot more information needed prior to making an investment decision. Let us know if we can provide more information to help in that process.”

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