Thinking of Divesting in the Carbon Bubble? Here's a Few Ethical Re-Investment Ideas

Hot on the heels of the Carbon Tracker Report came Bill McKibben's Rolling Stone article 'Global Warming's Terrifying New Math' followed by a deluge of articles from every corner of the Climate Change choir explaining why trillions of stock market dollars are at risk because the Carbon Bubble is about to burst and when it does it'll plunge the world into another financial crisis. All of them, be it Naomi Klein, McKibben, Brune, Van Jones, Hansen or others, explain that these stocks aren't just owned by the rich, that they are also broadly owned by everyday folks through their pension funds, mutual funds, bank deposits, RRSPs/401Ks etc. In the end every choir member says the only option folks have is to divest from the fossil fuel industries immediately.

Divesting for ethical reasons isn't a new idea, as far back as 1758, the Quakers prohibited members from participating in the slave trade - buying or selling humans. Most of the early proponents of socially responsible investing were religiously motivated and forbid followers from investing in  “sinful” companies, such as those associated with products such as guns, liquor, and tobacco. More recently divestment in South African companies was a powerful factor in their abandonment of apartheid.

Just for the record, mr. mud has zero investments or pension plans of any kind and has always considered 'Ethical Investments' as an oxymoron. None-the-less i spent a number of hours these last few days researching the wide field of 'Socially Responsible Investing' [SRIs] in order to be able to offer a few [damn few] positive options for folks wanting to divest as the CC choir correctly suggests.

Divesting in fossil fuels is meaningless though, other than as an honorable feel good exercise, if all that happens is that the money from the sale of those investments is simply reinvested in another aspect of the capitalist matrix. Every tentacle of capitalism just feeds or feeds on fossil fuels though usually disguised by wearing a different wig. My first step was to look into how SRI funds operate. There's a great chart here that compares the investment strategy of all the leading SRI funds graphically. It shows that none of them
is really what i'd call ethical, they can't be because they all have maximizing returns - profit - as their goal, that's their job. Capitalism only generates profits by externalizing, avoiding, costs be it by manufacturing goods in third world countries or by using the biosphere as toilet who's cleanup costs will have to be paid by future generations.

Anyway, here's a couple of highly regarded references to start your own research: The Moskowitz Prize for Socially Responsible Investing from UC Berkley has good ideas and interesting past winners. And the book 'Natural Capitalism: Creating the Next Industrial Revolution', by Paul Hawken, Amory and Hunter Lovins is the classic on ethical investing

So, if you think that ethical investing isn’t an oxymoron here's a short list of possible options. These 3 below are similar in that they use slightly different methods to provide their investors with the security of owning low-risk farmland while benefiting from the value added by converting it to certified organic farmland. There's Farmland LP, Peak Prosperity and Slow Money started by Paul Newman who said of it, "I just happen to think that in life we need to be a little like the farmer who puts back into the soil what he takes out. Recognizing the wisdom of these words, let us begin rebuilding our economy from the ground up."

Another type of option is the type of Municipal Bonds that are sold to raise the capital to build rapid transit systems. There are no easy answers, folks have to do their own research and direct their own investments. None of my options offer outrageous promises of huge riches but they all offer a good night's sleep.

My personal non-investment list includes: Saving money and the biosphere by putting your money into your home through upgrading insulation and more efficient heating systems. Putting it into your kid's education. Buying the stuff for and building a food garden, then building a composter, then building a chicken coop. If that's not possible, invest in local food security, and your own, by joining a local farm food buying coop. Put your money into buying land that has good water and air that can grow healthy organic food, build a home on it, eqip it with off grid power. There's still lottsa good small tracts of land available all over the world, the further you get from a mini-mall the better the prices become.

Living simply is the best advice and investment, the money you don't spend is money earned because the stuff you don't buy doesn't depreciate and the environment doesn't have mitigate the production and transportation wastes generated. Dirt under your fingernails hardwork isn't a sin but debt is. Only by jumping from the nest will you ever fly. Get Ready. Get Set. Jump!