"Without policies such as regulations or taxes on very polluting investments, it's unlikely that wealthy individuals making a lot of money from fossil fuel investments will stop investing in them," says one economist.
Having not read the article, I would wager a guess that because 401k balances are invested in diverse funds, and if the fund composition includes corporations contributing to emissions… and you are making money off their profitability… you are therefore contributing to those emissions. Pick other things to invest in.
But that’s not how it works. People buying the goods and services from those companies are the reason for the emissions, not someone that throws some money into the S&P.
I could own BP stock, but drive an electric car. If I sell my stock, there is 0 change to the emissions of BP.
It seems like they are grasping at straws for more ways to attack those with money, and at this point, not even a lot of money, as most companies offer a 401k. The last thing we should be doing is discouraging people from using those, as they will just be screwing their future self, especially if they have a company match.
But paying stock owners their share of the profits is, when you get right down to it, the reason BP exists. Maximum profit for a company like BP, and their shateholds, means minimizing their expenses and maximizing revenue. So sell as much gas as possible, and pay as little to offset the CO2 as possible. I don’t think it’s grasping at straws.
Owning the stock doesn’t impact profits. If I don’t own it, someone else will own it. Even if no one owns it and BP buys back the stock… the profits still exist.
BP isn’t sitting there saying, “FunderPants sold their mutual fund, cut back production by 10 barrels.” They’re producing to meet demand from the market. Profit is a byproduct of those sales. It has nothing to do with stock price.
Companies you invest in benefit from your investment in a variety of ways. Your investment provides the financial resources needed for the company to grow and expand. Your investment helps companies develop new products, hire more talent, expand into new markets, and improve their overall operations. Your investment essentially contributes to the company’s success.
When a company goes public it is done to raise money. In that initial public offering the company makes shares available to be purchased by the public. Sales of those shares generate money for the company. After that’s done, the company isn’t getting more money. They can decide to sell more stock at some point, but it’s not an everyday thing.
If I go out and buy a share of a company today, that company isn’t getting money from me. I’d be buying from some current owner who is looking to sell (or some market maker, but we don’t need to get too technical).
Not really. Share price has no bearing on financial health. Sometimes share prices have no connection with reality. Tesla is a perfect example. It has a market capitalization of 720 billion. Market cap. Is just the number of all classes of stock multiplied by their respective number of shares. I.e. how much it would cost to buy the company in it’s entirety. General motors has a market cap of 45 billion. Toyota, the world’s largest auto maker by sales, costs 264 billion. Without getting into P/E ratios and book values, stop to think about this. Tesla would have to sell more cars than Toyota, Volkswagen, GM, and Ford, COMBINED to be worth 720 billion. That is after a substantial drop in share price.
The way security analysts and prudent investors evaluate a company’s financial health is by looking at the financial statements they have to file every quarter with the SEC and make publicly available, calculating ratios, and comparing them to prior reporting periods, other companies in the same industry, and the overall market of the industry they are in.
As far as reputation, it probably doesn’t matter. The only shareholders anyone cares about are insiders and large shareholders (big enough to file a form 4) actively managed funds, and super Investors like Warren Buffett.
A 401k is simply an example that most people are aware of. It is really irrelevant as we could be talking about IRAs, investing your HSA, or even your basic taxable brokerage account.
Well 401k’s specifically replaced Pensions that were a much better bet for workers and required companies to fund them etc. Now all those other things exist so that people rich enough to leverage them all can minimize their tax burden. They are just Tax Shelters.
Pensions did go insolvent and laws were changed so that companies could include their pension fund as assets and leverage against them, also other companies could come and buy the fund and then claim that since they don’t offer a pension to their employees none of those pension protections applied.
Those situations could have been resolved in a way that was pro-worker, instead pensions were dissolved and all workers are encouraged to tithe to wall street since that is the “right way” to do things in our shitty society.
I’ll make sure to only invest in hippy communes that are self sustaining and use indigenous clothing and tool making techniques.
Every company on the stock market contributes to GHG emissions. Every company is using electricity produced by fossil fuels, or produces or uses plastic products, or has vehicles that consume fossil fuels.
https://youtu.be/NJ7W6HFHPYs - This video from Climate Town explains how the bank or credit union only keeps a fraction of your money in reserve when you deposit your money in a savings account, certificate of deposit, or other bank account. The bank/CU is investing the majority of your money, and ecological harm is not a consideration when they are choosing investments. When you deposit money with a financial institution it is almost certain that some portion of your money is being invested in ecologically harmful organizations.
Similarly, your 401k funds are likely in index funds or mutual funds that hold significant shares in ecologically and socially harmful companies like ExxonMobil, Nestle, Chevron, Coca-Cola, et. al.
Environmental, Social, and Governance (ESG) investment funds exist that ideally exclude ecologically & socially harmful industries, but every ESG fund I have ever encountered is not nearly exclusive enough and has significantly higher fees.
For example - the Vanguard ESG International Stock ETF VSGX excludes adult entertainment, recreational drugs, gambling, weapons, nuclear power, and fossil fuels, yet Nestle is the second largest holding in the fund, and many of the other stocks in the fund likely contribute to environmental and social harm indirectly.
Consider investing in small-businesses and organizations in your local community instead. It is truly bizarre and unique to our time that investing on Wall Street is more accessible than investing on Main Street.
If I buy or sell stock long after an IPO, I’m not giving or taking money from the company. Stocks are simply being bought and sold between other investors. It means nothing to the actual company other than a scoreboard they can point to, as the stock should reflect the performance and outlook of the company.
You can support a company by buying what they’re selling. Similarly, not buying what they are selling will show a lack of support.
What your advocating for with investing in small local companies has been show to reduce investing participation, as people are saddled with so many options they don’t know what to do and do nothing. It is also dramatically more risky, as they are now investing in single stocks. They are also investing based on emotion and ideals rather than the realities of what will drive an investment to go up. This seems like really bad advice they will hurt people’s retirement, while doing nothing to help the environment.
By contributing to demand for a stock you increase the valuation of that stock. Securities Based Lending is often how companies and executives secure loans and avoid taxable events. By contributing to demand for a stock we facilitate additional funding for the issuer of the stock and it’s largest shareholders.
I absolutely agree, cash flow is a much more immediate concern to any company, but one wealthy shareholder divesting can have the same financial impact as ten thousand average citizens boycotting. Local investing is more difficult and risky, but also more rewarding and necessary. It is not just about a monetary return, it is about building social capital and local resiliency.
You’re arguing that people should give no consideration to the long-term social and ecological harms of their investments beyond what will make them the most money. By directing our actions in that purely incentivized way we sacrifice everything unprofitable, and that alienation is exactly what causes so many chronic societal issues. I agree that an individual can have very little impact alone, but capitalism places this burden at the individual level.
We’re not talking about people trying to pull some kind of GME thing to manipulate a stock and artificially inflate its value. We’re talking about people investing in retirement accounts primarily. Someone’s ETF/mutual fund choice in their retirement account is not going to have those kinds of targeting impact on individual stocks in that fund.
When investing in something like the S&P 500, it’s not saying, “I believe and support these 500 specific companies,” it’s saying you believe in the American economy. An emerging market fund would similarly be a diversified bet on that sector. A fund keyed in on a particular market sector, like energy, retail, or home builders, would show belief in that industry.
I think the average person investing in their 401k should seek diversity above all else, because a retirement fund is a retirement fund, not a political or social statement. I’m not saying to invest in, or not to invest in, an oil company. I’m saying to invest in funds that give exposure to a broad cross section of the market and if there is an oil company in there, oh well, it’s just part of the economy.
Let your actions, what you buy from companies, dictate their success failure. If/when renewable energy hits its tipping point, the index will likely include those renewable energy companies in the fund, and maybe even one day remove the oil companies if they are on their way out. And if/when that happens, great, you’re already invested and have nothing extra to do.
Investing in some kind of broad market index is not the same as being a big investor showing support for a company by giving a direct investment and being invested in the success of that individual company. I don’t care what happens to any individual stock in the S&P, as long as the overall market is moving in the right direction. And for 99.99999% of investors, they shouldn’t either.
If someone has some funds to invest beyond their retirement fund, and they want to help promising local businesses and invest directly with them. I think that’s great, but that’s not a retirement fund, it’s an expensive lottery ticket in most cases.
It means nothing to the actual company other than a scoreboard they can point to, as the stock should reflect the performance and outlook of the company.
Except that scoreboard is exactly what they point to when they need a loan or other capital investment to grow their business. Better stock value = bigger/better loans.
Oh, and also the companies are able to release additional stock to raise capital outside of their IPO.
And their executives are rewarded for having high stock value.
And you think when a company release good earnings numbers that the stock is going to stay low because a couple of people sold in the name of the earth? If there is even a minor impact for a major company it will be seen that it’s undervalued and that stock will get brought right back up.
And when we’re talking about index funds, no one is even going to notice anything. The stock influences the index, not the other way around. You’re not going to sell so many shares of the S&P that you tank the market. It’s way too liquid for that.
There are videos out there of both Steve Jobs and Jeff Bezos being questioned about their undervalued stock from long ago. Both of them said it didn’t matter, because they knew the business was solid. And if getting a loan, investors will be looking at the health of the business and the ability to pay back the loan and to make a profit, not just looking at the stock price. Giving a bunch of money to a failing company with an overvalued hyped up stock isn’t a good idea. If the investors are getting a share of the company, they would actually prefer the stock be undervalued, as that means their investment has some built in insurance and more room to grow. A company is projected to grow to $100B with a new investment, would you rather invest at a valuation of $20B or $75B. You’re saying $75B, but the answer is $20B.
This is about collective action, not just one or two people. You seem to be leaning heavily into the same excuses everyone uses when they don’t want to do the right thing if it’s even a small inconvenience. “Why should I do X when there’s a bunch of other people doing Y? It’ll never make a difference.”
would you rather invest at a valuation of $20B or $75B. You’re saying $75B, but the answer is $20B.
I’ve got no idea where you went overboard here, but what I’m saying is, if the company in question is doing significant harm to the planet, don’t invest. Not sure why you thought I meant invest later.
And if the moral argument against profiting from harmful industries isn’t good enough for you, financially you’re introducing risk to your portfolio by choosing to invest in companies that are at high risk of running into regulatory challenges and lawsuits globally.
I don’t think anyone should be investing their retirement account with single stocks, which makes almost all of this a moot point imo, but people seem to want to throw broad market index funds away because they contain 1 stock they don’t like.
That’s going to hurt a lot of people taking that advice, as picking stocks just based on morals is probably going to net them a horrible result. Even people trying to pick stocks based on financials of the companies usually have terrible results, or at least not as good as the index fund over the long haul. The exceptions to this rule are unicorns.
If institutional investors want to divest from fossil fuels, cool. They can band together to make massive impacts, as they drive the market. And if it has enough impact, those stocks may end up getting removed from the index funds at some point, cool… but the average person just trying to figure out where to stick their 15% for retirement, or us the company match, should not be heading down this road. They’re just going to screw themselves 99.9999% of the time.
Boy you sure are acting incredibly dense. You’re acting like I’m implying normal investing guidance doesn’t apply. Please stop making up worst case scenarios to try and justify supporting climate damage. I’m not saying dump all your money into a single solar stock somewhere.
There’s literally hundreds of ETFs & mutual funds focused on avoiding the major polluting businesses. For example, just look at things like SPYX instead of SPY, etc. (Adding an extra bit to emphasize I’m using this as an example, not telling everyone to only invest in SPYX, because I can already see your response coming in laser focused on that one example). There’s countless options, do some homework if you’re investing, as you should be doing regardless of whether or not you care about the climate.
The one that’s currently hardest is target date retirement funds which many use for their 401k. Not because there aren’t enough options, but because many fund managers don’t include those options in their offerings. Your hands may be tied but at least you looked. Contact your fund manager and let them know you’re interested in ESG investing.
I’m not saying dump your money down the drain, but check if your investments can be moved somewhere less harmful.
I think we need to keep in mind that as the options for 401k investing increase, program participation drops. So in many cases it can become a question of having a retirement fund or having nothing at all. As you increase the perceived barrier to entry for people, they get overwhelmed and quit, or more likely, never start. A majority of people aren’t great investors, they’re not even good investors, and they have no interest in learning the normal guidance. That’s why target date funds are so popular in the first place. Planning to retire in 2050, great, pick the 2050 fund, done. Too many people don’t even get that far.
Probably has to do with the investments themselves. You may not be personally ‘picking’ the investments, however, most target funds include investments that have such investments. Source: wife works at a financial institution. Also I’m drinking so Google it ontop of it or something.
One of the high-growth sectors in most american’s 401k’s is “Energy”. This is a euphemism for fossil fuel companies, such as Shell, BP, and the various supporting industries. Another high-growth sector is “home construction,” which is literally an industry that exist to pave over paradises and put in parking lots creating sprawling suburbs in it’s wake that are owned by companies like Blackrock.
To be fair, you can’t really get away from that, especially since you don’t really have the ability to manage your 401k that way. But passive growing investments absolutely feed Capitalism and directly contribute to the massive polluters.
So workers should forgo the high-growth sectors and fuck themselves over…. for what exactly? Not buying their stock has 0 impact on their growth or outlook.
You can invest in them, if there what’s growing, while at the same time not actually using stuff from those industries. Live in 100 year old house in a walkable city, with an electric car (if needed), which you charge with solar panels so you don’t need to pull from the coal powered grid.
Then I’m not sure what the point of this discussion is, as it seems to be trying to tell people they need to sell their stock to be moral in the eyes of the climate change advocates.
Hard to say what the motivation of this article is, but yea I agree. The article seems listless. They make a grand claim “10% is responsible for 40%!!!” but they dont’ really examine the claim. I absolutely think it’s a true, but without further analysis and a conclusion to be drawn, what is the point? The point of the article as far as I can tell is to advocate for a market based solution that somehow a carbon-based tax will magically make share-holders stop destroying the environment? It’s drivel.
Huh? How is my 401k being counted toward my CO2 emissions? That makes 0 sense.
Having not read the article, I would wager a guess that because 401k balances are invested in diverse funds, and if the fund composition includes corporations contributing to emissions… and you are making money off their profitability… you are therefore contributing to those emissions. Pick other things to invest in.
But that’s not how it works. People buying the goods and services from those companies are the reason for the emissions, not someone that throws some money into the S&P.
I could own BP stock, but drive an electric car. If I sell my stock, there is 0 change to the emissions of BP.
It seems like they are grasping at straws for more ways to attack those with money, and at this point, not even a lot of money, as most companies offer a 401k. The last thing we should be doing is discouraging people from using those, as they will just be screwing their future self, especially if they have a company match.
But paying stock owners their share of the profits is, when you get right down to it, the reason BP exists. Maximum profit for a company like BP, and their shateholds, means minimizing their expenses and maximizing revenue. So sell as much gas as possible, and pay as little to offset the CO2 as possible. I don’t think it’s grasping at straws.
Owning the stock doesn’t impact profits. If I don’t own it, someone else will own it. Even if no one owns it and BP buys back the stock… the profits still exist.
BP isn’t sitting there saying, “FunderPants sold their mutual fund, cut back production by 10 barrels.” They’re producing to meet demand from the market. Profit is a byproduct of those sales. It has nothing to do with stock price.
Companies you invest in benefit from your investment in a variety of ways. Your investment provides the financial resources needed for the company to grow and expand. Your investment helps companies develop new products, hire more talent, expand into new markets, and improve their overall operations. Your investment essentially contributes to the company’s success.
This is only true if buying an IPO.
When a company goes public it is done to raise money. In that initial public offering the company makes shares available to be purchased by the public. Sales of those shares generate money for the company. After that’s done, the company isn’t getting more money. They can decide to sell more stock at some point, but it’s not an everyday thing.
If I go out and buy a share of a company today, that company isn’t getting money from me. I’d be buying from some current owner who is looking to sell (or some market maker, but we don’t need to get too technical).
TIL, thanks
Still, they do benefit from my owning stock, even if it’s just their reputation and indicator of financial health.
Not really. Share price has no bearing on financial health. Sometimes share prices have no connection with reality. Tesla is a perfect example. It has a market capitalization of 720 billion. Market cap. Is just the number of all classes of stock multiplied by their respective number of shares. I.e. how much it would cost to buy the company in it’s entirety. General motors has a market cap of 45 billion. Toyota, the world’s largest auto maker by sales, costs 264 billion. Without getting into P/E ratios and book values, stop to think about this. Tesla would have to sell more cars than Toyota, Volkswagen, GM, and Ford, COMBINED to be worth 720 billion. That is after a substantial drop in share price.
The way security analysts and prudent investors evaluate a company’s financial health is by looking at the financial statements they have to file every quarter with the SEC and make publicly available, calculating ratios, and comparing them to prior reporting periods, other companies in the same industry, and the overall market of the industry they are in.
As far as reputation, it probably doesn’t matter. The only shareholders anyone cares about are insiders and large shareholders (big enough to file a form 4) actively managed funds, and super Investors like Warren Buffett.
401k’s were the scam to begin with.
A 401k is simply an example that most people are aware of. It is really irrelevant as we could be talking about IRAs, investing your HSA, or even your basic taxable brokerage account.
Well 401k’s specifically replaced Pensions that were a much better bet for workers and required companies to fund them etc. Now all those other things exist so that people rich enough to leverage them all can minimize their tax burden. They are just Tax Shelters.
Yes and no…
Lol, as if pension funds never go insolvent and companies never played games reducing benefits (or other shenanigans so they don’t have to pay out).
At least with a 401k they can’t take the money back once it is deposited.
Pensions did go insolvent and laws were changed so that companies could include their pension fund as assets and leverage against them, also other companies could come and buy the fund and then claim that since they don’t offer a pension to their employees none of those pension protections applied.
Those situations could have been resolved in a way that was pro-worker, instead pensions were dissolved and all workers are encouraged to tithe to wall street since that is the “right way” to do things in our shitty society.
Yes and no…
I’ll make sure to only invest in hippy communes that are self sustaining and use indigenous clothing and tool making techniques.
Every company on the stock market contributes to GHG emissions. Every company is using electricity produced by fossil fuels, or produces or uses plastic products, or has vehicles that consume fossil fuels.
Every company contributes - only a few base their entire business model on it.
https://youtu.be/NJ7W6HFHPYs - This video from Climate Town explains how the bank or credit union only keeps a fraction of your money in reserve when you deposit your money in a savings account, certificate of deposit, or other bank account. The bank/CU is investing the majority of your money, and ecological harm is not a consideration when they are choosing investments. When you deposit money with a financial institution it is almost certain that some portion of your money is being invested in ecologically harmful organizations.
Similarly, your 401k funds are likely in index funds or mutual funds that hold significant shares in ecologically and socially harmful companies like ExxonMobil, Nestle, Chevron, Coca-Cola, et. al.
Environmental, Social, and Governance (ESG) investment funds exist that ideally exclude ecologically & socially harmful industries, but every ESG fund I have ever encountered is not nearly exclusive enough and has significantly higher fees.
For example - the Vanguard ESG International Stock ETF VSGX excludes adult entertainment, recreational drugs, gambling, weapons, nuclear power, and fossil fuels, yet Nestle is the second largest holding in the fund, and many of the other stocks in the fund likely contribute to environmental and social harm indirectly.
Consider investing in small-businesses and organizations in your local community instead. It is truly bizarre and unique to our time that investing on Wall Street is more accessible than investing on Main Street.
If I buy or sell stock long after an IPO, I’m not giving or taking money from the company. Stocks are simply being bought and sold between other investors. It means nothing to the actual company other than a scoreboard they can point to, as the stock should reflect the performance and outlook of the company.
You can support a company by buying what they’re selling. Similarly, not buying what they are selling will show a lack of support.
What your advocating for with investing in small local companies has been show to reduce investing participation, as people are saddled with so many options they don’t know what to do and do nothing. It is also dramatically more risky, as they are now investing in single stocks. They are also investing based on emotion and ideals rather than the realities of what will drive an investment to go up. This seems like really bad advice they will hurt people’s retirement, while doing nothing to help the environment.
By contributing to demand for a stock you increase the valuation of that stock. Securities Based Lending is often how companies and executives secure loans and avoid taxable events. By contributing to demand for a stock we facilitate additional funding for the issuer of the stock and it’s largest shareholders.
I absolutely agree, cash flow is a much more immediate concern to any company, but one wealthy shareholder divesting can have the same financial impact as ten thousand average citizens boycotting. Local investing is more difficult and risky, but also more rewarding and necessary. It is not just about a monetary return, it is about building social capital and local resiliency.
You’re arguing that people should give no consideration to the long-term social and ecological harms of their investments beyond what will make them the most money. By directing our actions in that purely incentivized way we sacrifice everything unprofitable, and that alienation is exactly what causes so many chronic societal issues. I agree that an individual can have very little impact alone, but capitalism places this burden at the individual level.
We’re not talking about people trying to pull some kind of GME thing to manipulate a stock and artificially inflate its value. We’re talking about people investing in retirement accounts primarily. Someone’s ETF/mutual fund choice in their retirement account is not going to have those kinds of targeting impact on individual stocks in that fund.
When investing in something like the S&P 500, it’s not saying, “I believe and support these 500 specific companies,” it’s saying you believe in the American economy. An emerging market fund would similarly be a diversified bet on that sector. A fund keyed in on a particular market sector, like energy, retail, or home builders, would show belief in that industry.
I think the average person investing in their 401k should seek diversity above all else, because a retirement fund is a retirement fund, not a political or social statement. I’m not saying to invest in, or not to invest in, an oil company. I’m saying to invest in funds that give exposure to a broad cross section of the market and if there is an oil company in there, oh well, it’s just part of the economy.
Let your actions, what you buy from companies, dictate their success failure. If/when renewable energy hits its tipping point, the index will likely include those renewable energy companies in the fund, and maybe even one day remove the oil companies if they are on their way out. And if/when that happens, great, you’re already invested and have nothing extra to do.
Investing in some kind of broad market index is not the same as being a big investor showing support for a company by giving a direct investment and being invested in the success of that individual company. I don’t care what happens to any individual stock in the S&P, as long as the overall market is moving in the right direction. And for 99.99999% of investors, they shouldn’t either.
If someone has some funds to invest beyond their retirement fund, and they want to help promising local businesses and invest directly with them. I think that’s great, but that’s not a retirement fund, it’s an expensive lottery ticket in most cases.
Except that scoreboard is exactly what they point to when they need a loan or other capital investment to grow their business. Better stock value = bigger/better loans.
Oh, and also the companies are able to release additional stock to raise capital outside of their IPO.
And their executives are rewarded for having high stock value.
And you think when a company release good earnings numbers that the stock is going to stay low because a couple of people sold in the name of the earth? If there is even a minor impact for a major company it will be seen that it’s undervalued and that stock will get brought right back up.
And when we’re talking about index funds, no one is even going to notice anything. The stock influences the index, not the other way around. You’re not going to sell so many shares of the S&P that you tank the market. It’s way too liquid for that.
There are videos out there of both Steve Jobs and Jeff Bezos being questioned about their undervalued stock from long ago. Both of them said it didn’t matter, because they knew the business was solid. And if getting a loan, investors will be looking at the health of the business and the ability to pay back the loan and to make a profit, not just looking at the stock price. Giving a bunch of money to a failing company with an overvalued hyped up stock isn’t a good idea. If the investors are getting a share of the company, they would actually prefer the stock be undervalued, as that means their investment has some built in insurance and more room to grow. A company is projected to grow to $100B with a new investment, would you rather invest at a valuation of $20B or $75B. You’re saying $75B, but the answer is $20B.
This is about collective action, not just one or two people. You seem to be leaning heavily into the same excuses everyone uses when they don’t want to do the right thing if it’s even a small inconvenience. “Why should I do X when there’s a bunch of other people doing Y? It’ll never make a difference.”
Sure, in a vacuum, you selling your stock in BP won’t make a difference, but alternatively in a world where asset managers collections holding over $8 trillion in assets have pledged to divest from fossil fuels, the pool of people willing and able to buy up those shares is shrinking, and the more people who act the smaller the pool gets.
On this note:
I’ve got no idea where you went overboard here, but what I’m saying is, if the company in question is doing significant harm to the planet, don’t invest. Not sure why you thought I meant invest later.
And if the moral argument against profiting from harmful industries isn’t good enough for you, financially you’re introducing risk to your portfolio by choosing to invest in companies that are at high risk of running into regulatory challenges and lawsuits globally.
I don’t think anyone should be investing their retirement account with single stocks, which makes almost all of this a moot point imo, but people seem to want to throw broad market index funds away because they contain 1 stock they don’t like.
That’s going to hurt a lot of people taking that advice, as picking stocks just based on morals is probably going to net them a horrible result. Even people trying to pick stocks based on financials of the companies usually have terrible results, or at least not as good as the index fund over the long haul. The exceptions to this rule are unicorns.
If institutional investors want to divest from fossil fuels, cool. They can band together to make massive impacts, as they drive the market. And if it has enough impact, those stocks may end up getting removed from the index funds at some point, cool… but the average person just trying to figure out where to stick their 15% for retirement, or us the company match, should not be heading down this road. They’re just going to screw themselves 99.9999% of the time.
Boy you sure are acting incredibly dense. You’re acting like I’m implying normal investing guidance doesn’t apply. Please stop making up worst case scenarios to try and justify supporting climate damage. I’m not saying dump all your money into a single solar stock somewhere.
There’s literally hundreds of ETFs & mutual funds focused on avoiding the major polluting businesses. For example, just look at things like SPYX instead of SPY, etc. (Adding an extra bit to emphasize I’m using this as an example, not telling everyone to only invest in SPYX, because I can already see your response coming in laser focused on that one example). There’s countless options, do some homework if you’re investing, as you should be doing regardless of whether or not you care about the climate.
The one that’s currently hardest is target date retirement funds which many use for their 401k. Not because there aren’t enough options, but because many fund managers don’t include those options in their offerings. Your hands may be tied but at least you looked. Contact your fund manager and let them know you’re interested in ESG investing.
I’m not saying dump your money down the drain, but check if your investments can be moved somewhere less harmful.
I think we need to keep in mind that as the options for 401k investing increase, program participation drops. So in many cases it can become a question of having a retirement fund or having nothing at all. As you increase the perceived barrier to entry for people, they get overwhelmed and quit, or more likely, never start. A majority of people aren’t great investors, they’re not even good investors, and they have no interest in learning the normal guidance. That’s why target date funds are so popular in the first place. Planning to retire in 2050, great, pick the 2050 fund, done. Too many people don’t even get that far.
Probably has to do with the investments themselves. You may not be personally ‘picking’ the investments, however, most target funds include investments that have such investments. Source: wife works at a financial institution. Also I’m drinking so Google it ontop of it or something.
Edit* Also totally shouldn’t count.
One of the high-growth sectors in most american’s 401k’s is “Energy”. This is a euphemism for fossil fuel companies, such as Shell, BP, and the various supporting industries. Another high-growth sector is “home construction,” which is literally an industry that exist to pave over paradises and put in parking lots creating sprawling suburbs in it’s wake that are owned by companies like Blackrock.
To be fair, you can’t really get away from that, especially since you don’t really have the ability to manage your 401k that way. But passive growing investments absolutely feed Capitalism and directly contribute to the massive polluters.
So workers should forgo the high-growth sectors and fuck themselves over…. for what exactly? Not buying their stock has 0 impact on their growth or outlook.
You can invest in them, if there what’s growing, while at the same time not actually using stuff from those industries. Live in 100 year old house in a walkable city, with an electric car (if needed), which you charge with solar panels so you don’t need to pull from the coal powered grid.
This isn’t a problem that an individual investor can or should be expected to solve.
Then I’m not sure what the point of this discussion is, as it seems to be trying to tell people they need to sell their stock to be moral in the eyes of the climate change advocates.
Hard to say what the motivation of this article is, but yea I agree. The article seems listless. They make a grand claim “10% is responsible for 40%!!!” but they dont’ really examine the claim. I absolutely think it’s a true, but without further analysis and a conclusion to be drawn, what is the point? The point of the article as far as I can tell is to advocate for a market based solution that somehow a carbon-based tax will magically make share-holders stop destroying the environment? It’s drivel.
That’s just more carbon offset bull shit, which is mostly a scam.
It’s 100% a scam.