Over the past few months at JLens (a Jewish impact investing consulting organization) we’ve been asked about climate change and the growing call for divestment from fossil fuels. The Jewish imperative to protect the environment dates back to creation itself. As God said to Adam before all the trees in the Garden of Eden, “See my works, how fine and excellent they are! Think upon this, and do not corrupt and desolate my world; for if you corrupt it, there is no one to set it right after you.” (Ecclesiastes Rabbah 7:28). The Jewish community is called upon to “till and tend” God’s Earth (Genesis 2:15). From the Tanach: “One generation goes and another generation comes, but the Earth remains forever” (Kohelet 1:4).
As concern over climate change crescendos, leading environmentalists have created www.350.org, a global climate movement to preserve a livable planet and reduce the amount of carbon dioxide in the atmosphere to below 350ppm. The movement urges public institutions to divest from the fossil fuel industry. So far a number of universities, municipalities, religious institutions and pensions have considered divestment proposals.
While protecting the environment is a clear mandate for the entire Jewish community, there is not a ‘one size fits all’ approach for investors. For our Jewish institutional clients who are concerned about climate change, we’ve compiled five potential strategies for consideration. (Before implementing any new investment strategy, please consult with a financial professional to determine suitability)
1. Engage in shareholder activism to vote proxies and sponsor resolutions in favor of increased corporate disclosure on environmental concerns.
2. Offset the harm caused by fossil fuel companies by investing in renewable energy and clean technologies across asset classes (equity, fixed income and alternatives)
3. Adopt a ‘best in sector’ approach. Investors maintain an allocation to the energy sector but emphasize investment in the highest ranked companies based on social and environmental criteria, while eliminating the laggards.
4. Eliminate the ‘Filthy 15’ from portfolios. The Filthy 15 are the largest and dirtiest coal companies listed in the United States as compiled by As You Sow.
5. Divest from the top 100 listed coal companies and the top 100 listed oil and gas companies as determined by Carbon Tracker Initiative.
Investment strategies are just one of many considerations for members of the Jewish community concerned about the planet. The Coalition on the Environment and Jewish Life (COEJL) is an excellent resource to explore additional options and to learn more about energy conservation, sustainability, public policy, and Jewish environmental wisdom.