(This is the second post about Green Fund investing. For an explanation of “green” investing, and how it fits with Quaker principles, see part one. The text in these posts comes from the most recent Friends Fiduciary newsletter. Re-published with permission.)
You Can Invest in Solving Climate Change Issues
Friends’ investment in green bonds in the Consolidated Fund reached 11% of the total portfolio in 2014, and we expect that figure to grow. We are excited about the potential for these securities to provide attractive returns, diversification and climate-change benefits. One example of a fund holding is a bond issued by the European Bank for Reconstruction and Development (EBRD) to fund its Green Project Portfolio. The EBRD was founded in 1991 to aid developing European democracies in the aftermath of the Cold War. Today it works to foster sustainable market economies in Europe, Asia and the Middle East. Its Green Project Portfolio finances endeavors focused on energy efficiency, clean energy, and other environmental benefits, including upgrading power plants to reduce total greenhouse gas emissions. The fund also holds bonds issued by Vornado Realty Trust, a publicly-traded real-estate investment trust, with proceeds of the bonds used to fund new LEED-certified buildings and upgrade existing structures to LEED standards.
At the beginning of 2014, we launched our Quaker Green Fund (QGF) to enable our constituents to target their assets specifically to environmentally-beneficial investments. Not only does the fund exclude fossil fuel companies, it also actively seeks opportunities to invest in the clean energy and clean technology sectors. As a new portfolio, with just over $13 million under management as of December 31, 2014, the Quaker Green Fund is currently less able to take significant positions like the much larger Consolidated Fund. Nonetheless, the QGF currently invests 2% of its assets in green bonds and we anticipate that this will grow appreciably as the fund grows.
The Quaker Green Fund is an especially attractive investment opportunity if you are concerned about climate change. While all of our funds support environmental stewardship, the Quaker Green Fund is specifically directed to address climate change from a solutions-oriented perspective. The fund is alanced, diversified and ‘fossil fuel free.’ As with all of our offerings, it is specifically designed for Friends meetings, churches, and organizations, and is open to both new and existing Friends Fiduciary investors.
The fund adheres to FFC’s Quaker values investment guidelines, and goes a step further by excluding fossil fuel companies. Our active shareholder advocacy work encompasses the companies in this fund as well. In addition to eschewing investment in fossil fuel companies, the Quaker Green Fund includes investments in a new ‘cleantech’ category. Those cleantech investments are in nine positive environmental areas, including advancements in sustainable use of agricultural resources, alternative energy, renewable energy, efficient transport, energy conservation, water conservation, water filtration, low carbon finance, and cutting-edge clean technologies. This approach provides exposure to the interconnected segments of clean energy and clean technology while providing diversification to manage the overall profile of risk and volatility.
Please visit our website or contact us directly for additional information about the Quaker Green Fund or green bonds. We are enthusiastic about the benefits this emerging fixed-income category offers and hope you will share that enthusiasm.