Green Century – ESG Impact Investing

Values Investors Podcast | Socially Responsible Investing, ESG, Ethical, Impact, Sustainable Investments

Green Century Mutual Funds – Shareholder Advocacy

This blog / podcast / video are an interview with Jared Fernandez, a shareholder advocate at Green Century mutual funds. See our video here.

Jared Fernandez spent his professional life working to better our national food system. Conventional agriculture is carbon intensive and national food policy prioritizes feeding cattle over communities – he has worked to promote regional food systems that simultaneously build soils, economies, and communities.

Green Century is a mutual fund company – they combine a fossil fuel free sustainable investing strategy with award-winning shareholder advocacy and support of environmental non-profits to deliver.

Here are some notes from our discussion:

What does Green Century offer?

An environmentally responsible mutual fund company. They seek to invest in environmental innovators such as companies involved with renewable energy, water efficiency, healthy food, and companies who are leading in ESG factors (environmental, social, and governance).

There is a large body of information showing that incorporating ESG factors in the analysis improves performance.

Green Century offers three mutual funds: international, US equity and a balanced fund. The international fund started in 2016 and is the first fossil fuel free index fund. The balanced fund has 70% stock 30% bond – about half of the bonds are green bonds that support green projects around the globe.

How big of a component is shareholder advocacy at Green Century

There are three prongs to their approach:

1. Investment strategy
2. Founded by a group of non-profits – every dollar that Green Century earns goes back to the non-profits
3. Shareholder advocacy – two full time advocates

What are your focus areas

• Preserving tropical forests
• Promoting alternative energy
• Pollinators
• Keeping anti-biotics
• Conserving Ocean health
• Pollution
• Reducing food waste
• Promoting plant based protein

Sustainable agriculture is a large driver in our impact on the environment.

How does Green Century engage with companies?

They do considerable engagement. They vote their proxies and bring issues and dialog with companies. If they cannot make progress with them, they will file a shareholder resolution.

They engage with companies who are responsible for massive rates of deforestation.

To pick what companies to look at, they look at:

• Size scope of company
• Importance to the company
• Specifics of problem
• Looking at more unique issue areas such as food waste (40% of food produced in America is wasted)

Having companies measure their impact is an important first step

What is an example of your engagement?

Green Century engaged with Tyson foods to have them look at the risk of not being in the plant based protein market and Tyson foods purchased a state in a plant based protein company and has done more work in that area. The hope is that they see that as a growing market and move in that direction.

How can investors determine how active a mutual fund company is?

They can look at:

• What organizations that the mutual fund company belongs to?
• What broader networks they are part of?
• Are they part of advisory boards?
• Do they vote proxies?
• Do they file shareholder resolutions?
• How many staff people are dedicated to shareholder advocacy?

Green Century filed 10 resolutions in 2018. Many were withdrawn. They attended two shareholder meetings to present proposals at General Mills and Daron Restaurants.

Agriculture is one of the biggest impacts on the environment and climate change. Sustainable agriculture helps with water pollution, community health, antibiotics in agriculture.

Do you feel shareholder advocacy is making a difference?

In the absence of a strong administration supporting environmental legislation, companies need to step up to make a difference.

Here our full interview here.

Get more information about Green Century at: https://www.greencentury.com/

And about their shareholder advocacy at: https://www.greencentury.com/impact/

This podcast, blog and video are for informational use only. We are not making investment recommendations. This is not an appropriate investment for everyone. As with any investment, please read the prospectus and discuss it with your financial planner.

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