Monday, June 10, 2013

Alignments

In the temperate northern climate here in the Great Lakes we find our roads crumble from the frequent freeze/thaw theatre that is our climate.


Whether on a bicycle or driving a car, dodging potholes every spring is water cooler talk. And our GDP goes up from all the repairs to vehicles especially wheel alignment shops.

Once we feel the wobble, or note the pulling of the vehicle to the left or right we know it's time for the alignment specialist. Another area where we are in need of alignment, but which goes larger unnoticed is our investment portfolio. We were raised to believe that we were investing to simply get the largest and quickest financial return, while also minimizing risk of loss. For those employees who actually have a choice in where to invest their retirement funds, we typically look for the biggest returns, even if all investment marketing has the disclaimer, that past performance does not guarantee future performance.

For a minority of investors there has been an effort to align their personal or institutional values with the investments they make. For foundations this has been nicknamed "mission-based investing". I mean why would a foundation that is supporting environmental causes invest in a corporation that has a horrible record of despoiling the environment. Why would a union pension fund invest in companies that won't pay a living wage?

Most often institutions and private investors turn their investments over to "professional" financial planners to sort through the myriad choices. The contracts are based upon ongoing positive return-on-investment (ROI). As long as the ROI meets expectations quarterly or annually, the financial planner will likely keep their contract. The emphasis then is placed on short-term ROI by playing the markets. Unfortunately this grand casino is rigged and the losers are many.



So in recent months there has been a call for divestment from fossil fuel companies in response to their role in both climate change and funding of climate change denial/lobbying efforts.


Like earlier divestment campaigns - South African apartheid, nuclear weapons,  those who initiate the discussion are called socialists, radicals, lunatics, etc. Names that have been hurled at others who dared to challenge the status quo - abolitionists, suffragists, anti-war protesters, civil rights advocates. Yet how do we align the increasing scientific assessment that the increased human induced CO2 releases into the atmosphere might lead us to existential risk?

Check your portfolios - retirement fund,  bank account, institutional endowments, mutual funds to see if your values and the world's needs align. The risk to future generations might be worth reconsidering what you do with your money.