4 ms·

Divestment is one of the most effective ways to fight climate change. And guess what, you can do it yourself too. Shift your investments from fossil to green.

Divestment is one of the most effective ways to fight climate change. And guess what, you can do it yourself too. Shift your investments from fossil to green. If you can't find enough worthy greens, shift it to anything else. Some say it won't impact your returns: http://www.lse.ac.uk/GranthamInstitute/news/the-mythical-peril-of-divesting-from-fossil-fuels/ http://www.lse.ac.uk/GranthamInstitute/news/the-mythical-per... Move your deposits and savings to a more sustainable bank. It's very easy to do yet quite powerful https://fairfinanceguide.org https://fairfinanceguide.org

mech1234 7y ago
In terms of investment risk and returns: The more honest approach is to admit that shifting your investments will make you marginally less diversified and exposed to marginally greater idiosyncratic risk, but to weigh the tradeoffs and to do it anyway. The tradeoffs include the possibility that the remaining investors who do not choose to starve the industry have greater investment upside by being able to buy at a less competitive/lower price.
ryanmercer 7y ago
It's far easier, and safer, for me (many of us) to invest in broad market index funds though. I have neither the skill nor time to track individual companies. I'm just trying to have enough money for basic cost of living when I'm 70, I only make about 34k a year (and turn 35 this month) and am unable to even adequately fund my retirement so I can't afford to gamble on random renewable energy companies I'm guessing I'm invested, via such funds, in numerous fossil fuel companies. It's just gotta be that way for a lot of us.
- richardknop 7y ago
  There are ETFs that don't invest in fossil fuel companies. You can invest in these ETFs to get broad market exposure minus fossil fuel companies.
  - bamboozled 7y ago
    I have done this and they’ve been performing excellently for me.
  - ryanmercer 7y ago
    Not in my 401k plan though. It's great for people earning 6 figures or more that have lots of income to throw at investments, but for the common man that is doing their best to even make the minimum contribution needed for maximum employer match in something like a 401k (if they even have an employer match, or access to a 401k) they are locked in to whatever funds their employer has allowed in the plan. The median household income in the United States is around $63,000 with an average household size of 2.6 people. Unfortunately many of us simply lack the luxury to invest in such ways, we do our best just to invest. At best I could throw 1-2% of my income into an IRA and buy some ETF that invests in renewables which would equate to a drop in a swimming pool and interestingly at 2% it would be about 1% of my gross income less than the amount I spend on gasoline annually at current prices (I pretty much only drive to work and church, I bought my 2013 Impala in 2013 and I'm at like 68k miles).
    - icebraining 7y ago
      Portraying the fact that you have the option of tax-sheltered, employer-matched investment as a "lack of luxury" is kind of weird.
      - ryanmercer 7y ago
        >as a "lack of luxury" is kind of weird. I did no such thing. In fact, I am unable to even contribute enough to meet my full employer match (like most of the people in my office). I said I don't have the luxury of investing meaningful amounts of money into potentially risky stocks/funds that only invest in renewable energies instead of broad market/whole market index funds that also include fossil fuel driven companies. As far as tax-sheltered, it looks like 59-65% of Americans have access to a 401k [1], something like 3 million teachers will have access to a 403b, and those that don't have access to either are almost certainly eligible for an IRA. [1] - https://www.cnbc.com/2018/03/12/how-many-americans-dont-have-access-to-a-401k.html https://www.cnbc.com/2018/03/12/how-many-americans-dont-have...
- dnadler 7y ago
  You can do both (sort of) through an ESG weighted ETF. ESG stands for" Environment, Social, Governance", and represents the inclusion of these factors in the construction of the portfolio. This is actually quite a big trend in Finance these days, and it's reasonable to believe that ESG ETFs could even outperform the broader market if you think the trend will continue/accelerate. I should say, these funds don't always completely remove exposure to coal companies (for example), but would at the very least down-weight them relative to a broader market index.
gruez 7y ago
>Divestment is one of the most effective ways to fight climate change. What's the source for this? There was a post from a few months ago that said the opposite. https://news.ycombinator.com/item?id=20998948 https://news.ycombinator.com/item?id=20998948
xyzzyz 7y ago
This kind of “divestment” is doing literally nothing to fight climate change. You’re just offering stocks in fossil companies at bargain prices, making them more attractive to hold by increasing ROI. Nothing changes in real economy, everything operates as usual.
- bamboozled 7y ago
  Except you’re taking your money elsewhere and “investing” in future technologies and providing them capital to grow and outpace fossil fuels ? If the majority of money was locked up in coal, there would be no capital for new types of power generation. You’re argument sounds like it might even be crafted to make people think divesting is pointless but it can’t be. Money is actually finite and therefore can be distributed in different ways.
  - SifJar 7y ago
    If you're buying stocks (outside of an IPO), you're not actually providing capital to a company though? You're just buying the shares from someone else & somewhere back in the chain of ownership, someone provided capital to the company.
    - icebraining 7y ago
      You're paying off the early investors who funded that company, making similar investments more attractive. Plus many companies do raise money by issuing new stock after IPO, or buy other companies with their own shares, and so a higher stock price benefits them, even if you don't buy those particular shares.
- ageofwant 7y ago
  I'm not selling them at a loss, if I can't get what I paid for them it means they are by definition worth less. Because I do not want them anymore it mean that that market has one less buyer so demand decreases by at least one. If hundred investors came to the same value judgement, the demand decreases by 100. What you are saying is that supply and demand does not matter in a market and I suspect it does.

mech1234 7y ago

In terms of investment risk and returns: The more honest approach is to admit that shifting your investments will make you marginally less diversified and exposed to marginally greater idiosyncratic risk, but to weigh the tradeoffs and to do it anyway. The tradeoffs include the possibility that the remaining investors who do not choose to starve the industry have greater investment upside by being able to buy at a less competitive/lower price.

ryanmercer 7y ago

It's far easier, and safer, for me (many of us) to invest in broad market index funds though. I have neither the skill nor time to track individual companies. I'm just trying to have enough money for basic cost of living when I'm 70, I only make about 34k a year (and turn 35 this month) and am unable to even adequately fund my retirement so I can't afford to gamble on random renewable energy companies I'm guessing I'm invested, via such funds, in numerous fossil fuel companies. It's just gotta be that way for a lot of us.

richardknop 7y ago
There are ETFs that don't invest in fossil fuel companies. You can invest in these ETFs to get broad market exposure minus fossil fuel companies.
- bamboozled 7y ago
  I have done this and they’ve been performing excellently for me.
- ryanmercer 7y ago
  Not in my 401k plan though. It's great for people earning 6 figures or more that have lots of income to throw at investments, but for the common man that is doing their best to even make the minimum contribution needed for maximum employer match in something like a 401k (if they even have an employer match, or access to a 401k) they are locked in to whatever funds their employer has allowed in the plan. The median household income in the United States is around $63,000 with an average household size of 2.6 people. Unfortunately many of us simply lack the luxury to invest in such ways, we do our best just to invest. At best I could throw 1-2% of my income into an IRA and buy some ETF that invests in renewables which would equate to a drop in a swimming pool and interestingly at 2% it would be about 1% of my gross income less than the amount I spend on gasoline annually at current prices (I pretty much only drive to work and church, I bought my 2013 Impala in 2013 and I'm at like 68k miles).
  - icebraining 7y ago
    Portraying the fact that you have the option of tax-sheltered, employer-matched investment as a "lack of luxury" is kind of weird.
    - ryanmercer 7y ago
      >as a "lack of luxury" is kind of weird. I did no such thing. In fact, I am unable to even contribute enough to meet my full employer match (like most of the people in my office). I said I don't have the luxury of investing meaningful amounts of money into potentially risky stocks/funds that only invest in renewable energies instead of broad market/whole market index funds that also include fossil fuel driven companies. As far as tax-sheltered, it looks like 59-65% of Americans have access to a 401k [1], something like 3 million teachers will have access to a 403b, and those that don't have access to either are almost certainly eligible for an IRA. [1] - https://www.cnbc.com/2018/03/12/how-many-americans-dont-have-access-to-a-401k.html https://www.cnbc.com/2018/03/12/how-many-americans-dont-have...
dnadler 7y ago
You can do both (sort of) through an ESG weighted ETF. ESG stands for" Environment, Social, Governance", and represents the inclusion of these factors in the construction of the portfolio. This is actually quite a big trend in Finance these days, and it's reasonable to believe that ESG ETFs could even outperform the broader market if you think the trend will continue/accelerate. I should say, these funds don't always completely remove exposure to coal companies (for example), but would at the very least down-weight them relative to a broader market index.

gruez 7y ago

>Divestment is one of the most effective ways to fight climate change. What's the source for this? There was a post from a few months ago that said the opposite. https://news.ycombinator.com/item?id=20998948 https://news.ycombinator.com/item?id=20998948

xyzzyz 7y ago

This kind of “divestment” is doing literally nothing to fight climate change. You’re just offering stocks in fossil companies at bargain prices, making them more attractive to hold by increasing ROI. Nothing changes in real economy, everything operates as usual.

bamboozled 7y ago
Except you’re taking your money elsewhere and “investing” in future technologies and providing them capital to grow and outpace fossil fuels ? If the majority of money was locked up in coal, there would be no capital for new types of power generation. You’re argument sounds like it might even be crafted to make people think divesting is pointless but it can’t be. Money is actually finite and therefore can be distributed in different ways.
- SifJar 7y ago
  If you're buying stocks (outside of an IPO), you're not actually providing capital to a company though? You're just buying the shares from someone else & somewhere back in the chain of ownership, someone provided capital to the company.
  - icebraining 7y ago
    You're paying off the early investors who funded that company, making similar investments more attractive. Plus many companies do raise money by issuing new stock after IPO, or buy other companies with their own shares, and so a higher stock price benefits them, even if you don't buy those particular shares.
ageofwant 7y ago
I'm not selling them at a loss, if I can't get what I paid for them it means they are by definition worth less. Because I do not want them anymore it mean that that market has one less buyer so demand decreases by at least one. If hundred investors came to the same value judgement, the demand decreases by 100. What you are saying is that supply and demand does not matter in a market and I suspect it does.