Category : FFI Perspectives Toggle

FFIUS: A Look Back, A Look Ahead

Celebrating the FFIUS Index This week, we’re marking the one-year anniversary of our benchmark FFIUS index, the Fossil Free Indexes US (FFIUS). Launched on June 26, 2014, the index was, at the time of its launch, the culmination of our work to date. Starting with the S&P 500, we screened the index to exclude the securities that are in The Carbon Underground 200TM, our ranking of the world’s largest public companies based on the...

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An Opportunity to Collaborate on Our Research

We’re embarking on some new research related to fossil free retirement plan options, and we’re hoping you’ll take a few minutes to participate. We've teamed up with the Responsible Endowments Coalition (REC) on this work. We’ve created a simple survey that will allow us to gain visibility into the availability of and interest in fossil free options in individuals’ retirement investment plans. Although respondents are given the option...

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Harvard’s Carbon Footprint Based on Reserves

Measuring and disclosing the carbon footprint of investments is at the heart of efforts such as the Montreal Carbon Pledge and the Portfolio Decarbonization Coalition, supported by institutional investors representing trillions in assets. It is the first important step in managing the investment risks associated with climate change and carbon regulation. One element of a carbon footprint relates to the current annual CO2 emissions of all...

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Fossil Free Indexes US – A Caveat on Performance Measurement

Research Brief Series Following on a year in which the FFIUS outperformed the S&P 500, it is reasonable to ask how adopting a carbon-aware approach to investing may be expected to affect investment performance over the long term. It is also reasonable to ask which carbon-aware investment approaches might entail the smallest negative effect on performance, if any. Below I discuss an important technical factor to keep in mind when seeking...

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Challenging Notions About the Negative Financial Impact of Divestment

A recently released report by Prof. Daniel Fischel calls into question the efficacy of institutional divestment from fossil fuels, both as a tactic for combating climate change and as a prudent financial strategy. But are the negative financial impacts of divestment really what Fischel claims? An examination of the assumptions made in his report raises doubts. Some of the assumptions made about institutional investing seem unrealistic. For...

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Expanding Divestment: University-Sponsored Defined Contribution Plans

The fossil fuel divestment movement has gained significant momentum across college campuses thanks to organizations like 350.org. On Monday, January 12, 300 Stanford University faculty members called for the divestment of fossil fuel companies from the endowment investment portfolio. While divestment calls have mostly targeted university endowment pools, we have started to see calls by university faculty to provide fossil free investment choices...

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Some Observations on Global Divestment Day 2015

The Debate Global Divestment Day is being marked around the world on February 13 and 14. Not unexpectedly, a vigorous debate around the merits of divestment has emerged. We believe that this debate is a positive sign, for it demonstrates the wide range of individuals and organizations who are engaged in the conversation. In any debate, however, it's important to stick to relevant facts. Throughout the course of February, some flawed but...

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Announcing The Carbon Underground 200TM 2015 Edition

We’re pleased to announce that today, to mark Global Divestment Day, we released an updated version of The Carbon Underground 200, our trademark list of top 200 public coal, oil, and gas companies. The list is publicly available on our website, on its own and as part of our updated report, The Carbon Underground 2015: The World’s Top 200 Public Fossil Fuel Companies Ranked by the Carbon Content of their Fossil Fuel Reserves. Our research...

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A Flawed Argument Against Fossil Fuel Divestment

Research Brief Series An often-stated misconception about fossil fuel divestment is that divestment must entail a sacrifice of returns and an increase in risk. This belief is not supported under examination of recent experience or the specifics of the stranded asset risk argument. The belief about the negative impact of divestment on risk and return is not a fact. It isn't even a generally shared belief. This belief does not objectively...

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Thoughts on the 2014 Performance of the FFIUS

Research Brief Series In the year just ended, the Fossil Free Indexes US (FFIUS) outperformed the S&P 500 by about 1.5%. This is a strikingly large number, when you consider that less than 10% of the market capitalization of the S&P 500 is in companies that are part of The Carbon Underground 200 (CU200) and, therefore, excluded from the FFIUS. This outperformance illustrates the value of an investment strategy that is carbon-aware....

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