Your Investments Are The Vote You Didn’t Know You Had. Read The Blog Now!
It’s Election Season – or haven’t you heard? – and this month we’re helping our readers relieve some of their election anxiety by addressing the issues they care about outside of the political sphere. If you think that involves investing sustainably, well, you’re spot on.
Your Investments Are The Vote You Didn’t Know You Had
This month’s blog takes a look at some of the key issues in this year’s election and how you can use your investments to fight for the change you want to see in the world. From human rights, to environmental concerns, to social justice issues, the same passions that drive you in the voting booth can be reflected in how you choose a mutual fund or an ETF.
One key difference between investing and political voting: your investing sustainably has nothing to do with what others decide. Your investment doesn’t have to win over anyone else – it’s your decision alone, and your candidate wins every time! The only way to lose …. Is not to play.
Greenwashing: Less of a Concern at the SEC?
In spring of 2021, as the term “ESG” was gaining momentum, the SEC launched a Task Force to address concerns of greenwashing. In the time since, the task force has imposed heavy fines on companies including Goldman Sachs, BNY Mellon, Deutshe Bank and JP Morgan for misleading investors about their sustainable investing products.
But over the last few months, the SEC has disbanded the task force. A spokesperson for the SEC explained that the task force was important when greenwashing was an “emerging risk,” and that efforts will come back should the risk levels rise again. However, this is another data point in a wider trend of ESG issues losing steam at the SEC along with unfinished regulations and changing official priorities.
While this is disheartening for the wider ESG community, savvy sustainable investors know that the best way to avoid greenwashing is to have high standards and ask tough questions of your sustainable fund managers. Avoiding greenwashing can be as simple as asking two questions: Does the fund say what it does, and does the fund do what it says?
Greenwashing: Fund Managers Still Getting Caught
OK, so it’s not all bad news in the enforcement wing of the SEC. Last month the Commission announced that they had caught advisory firm Wisdom Tree greenwashing their mutual funds, and slapped a $4 Million fine on the company. The greenwashing wasn’t particularly complicated – Wisdom Tree simply said that their funds were divesting from certain controversial industries, and a simple check of their investments showed that this wasn’t the case. As usual, an investor that looks under the hood of their sustainable fund would have sniffed this out pretty easily. Nonetheless, this is a nice win for the Greenwashing Detectives.
The Aha Moment: Checking in with Parallelle Finance
In this month’s Aha Moment column, Kyle Purcell profiles Angela Atherton and Marypat Thenell Smucker from Parallelle Finance. Kyle looks at how women who traditionally have turned to philanthropy to drive change with their money are finding other, more sustainable options, including by investing through groups like Parallelle, who connect gender-driven investors with women-led companies.
