Fossil Free funds
Fossil Free Funds - a project of As You Sow - helps individuals understand the climate implications of their mutual funds and to make sustainable investment decisions according to their values. Learn more about Fossil Free Funds.

Companies at all stages of the energy value chain have the opportunity to use their resources and investments to create positive, profitable change aligned with sustainable priorities. In a rapidly decarbonizing economy, where new technologies and low-cost renewable energy are aligning with the need for dramatic greenhouse gas reductions, energy companies have an increasingly clear ability to move away from harmful fossil fuels to cleaner, less socially disruptive energy sources. 

Unfortunately, not all companies are willing to change their status quo, instead doubling down on new projects that will lock in high-carbon and polluting energy sources for decades to come. Such projects increasingly create social conflict as movements build to curb carbon emissions and maintain global warming substantially below 2 degrees Celsius.

Recent alarming examples include fossil-fuel infrastructure projects that spark protests and result in human rights violations. Indigenous rights abuses from projects like the Dakota Access Pipeline (DAPL) give rise to financial risks including reputational damage, consumer boycotts, divestment, and litigation, which can adversely affect shareholder value. Investors are increasingly concerned that companies take proper steps to thoroughly review risks before investing in such projects. Beyond those directly executing projects that jeopardize human rights, scrutiny is additionally applied to entities such as banks that provide financing, credit lines, or other financial services that enable controversial projects to move forward. Public divestment movements have shown that banks are being held responsible for their investing policies and therefore are exposing shareholders to material risks.

Despite progress from some banks on fossil fuel financing (several banks have made commitments to no longer finance coal or tar sands, and the World Bank will stop financing most upstream oil & gas projects beginning in 2019), many banks continue to support fossil fuels through their lending practices and loan portfolios. Investors are becoming increasingly aware that banks can and should take responsibility for meeting their fair share of the global carbon reductions necessary to meet a two degree Celsius warming limit.

As You Sow engages directly with companies on these issues, advocating for diversification away from traditional energy sources and a keen focus on avoiding human rights violations associated with controversial projects.

In certain instances, a company’s trade association contributions and other political lobbying efforts may pose risks to shareholder value. Political contributions made by companies in the energy sector have proven to be sources of significant controversy, reputational damage, and business risk. As You Sow works to promote transparency regarding corporations’ use of funds to influence legislation and regulation. This transparency enables shareholders to assess if direct and indirect lobbying activities and expenditures are consistent with company goals and the best interests of investors.