Pension Fund Options Divested of Fossil Fuels

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conor20

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I would like to divest my pension of all investments directly related to fossil fuels. I work for a large multinational company, and I am in a position to have such a suitable fund added to the options for investment to it's employees. I would appreciate help in identifying appropriate funds that fit this bill. My company currently provides fund options from Blackrock, Irish Life and Zurich.
I have reached out to both and the two suggestions they have made are:
  1. The Zurich TopTech 100 Fund (invests in Software and Technology, Risk rating = 6/7)
  2. The Zurich Green Resources Fund (invests in renewable energy, Risk Rating = 6/7)
(I can't link directly to the fact sheets, but they are both available with a quick search).

These two funds are suitable in that they do not invest directly in any fossil fuel activities, but both are equity (and hence risk) heavy, so will not suit everyone. I'd be very interested in any suggestions to build a range of options from safe to risky. Preferably they would be offered by Blackrock, Irish Life or Zurich, but adding funds outside of these two is an option also.

Conor.
 
Interesting idea. Can I ask why you want to avoid fossil fuel investment? If it's for environmental reasons, it might be interesting to note that animal agriculture is the number one emitter of GHGs in Ireland and worldwide. Stay away from Kerry Group et al too!
 
It is partly for environmental reasons - it is now beyond all doubt that CO2, Methane and other byproducts of combusting fossil fuels are causing climate change, and I don't wish my pension funds to fund future oil, gas and coal exploitation to exacerbate this. I feel I owe that to my children. In terms of fossil fuel vs agricultural emissions - agriculture is responsible for a significant percentage of emissions alright, but there are not yet any large scale technological, emissions-free alternatives to our current agriculture system that one can invest in (I note some early stage meat-technology companies have received considerable investment from the Google founders, which promising as they may be, are not available for public investment yet). Fossil fuel alternatives on the other hand are already available and mature enough for managed funds to be available to invest in.

On top of the environmental reasons, I also simply see no future in the fossil fuel industry. The climate is heating up and that heating is accelerating. The situation cannot continue indefinitely without major consequences for society. And so the two future possibilities I envision are:
(1) Worldwide governments, who generally only react to crises finally see one in climate change and act on the Paris Climate Accord by taking aggressive steps to move off fossil fuels, diluting the value of fossil fuel based investments
(2) Runaway, self-reinforcing, catastrophic climate change ensues, in which case all bets will be off and share certificates will be meaningless.

If they are indeed the two possible future paths for Climate Change, then either way, fossil fuel investments are not a good allocation of one's pension fund.
 
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Hi Conor

You are taking very high risk in going for the Green Resources and Tech 100 as there isn't a huge amount of diversification.

Why not go for one of the Global Index funds. If fossil fuel companies lose value, their holding in the global index will fall off.

Insurance companies don't carry many (if any at all) Socially Responsible Funds as there simply isn't the demand for them in Ireland and they have been too expensive to carry on their platforms.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
SBarrett said:
Why not go for one of the Global Index funds. If fossil fuel companies lose value, their holding in the global index will fall off.
Click to expand...
I don't want my pension to be invested in the oil and coal companies when they inevitably fall off to nothing! I've noted several coal majors going bust in the last year including Peabody Energy, the world’s largest private coal company - coal can essentially no longer compete with Solar PV for new investment. I don't want to hang around as oil and eventually natural gas companies go the same way following the Paris accord.

SBarrett said:
You are taking very high risk in going for the Green Resources and Tech 100 as there isn't a huge amount of diversification.
Click to expand...
This is a reasonable point. Essentially what I'm looking for is something like the Vanguard High Dividend Yield ETF (which is 10.1% Oil and Gas), but without exposure to any fossil fuel companies. I've looked a lot further into this and found a much more diverse fund to those above: the iShares MSCI ACWI Low Carbon Target ETF offered by Blackrock, traded on the NYSE.

It's portfolio is well diversified:
Financials: 20.96%
IT: 15.06%
Consumer Discretionary: 13.1%
Industrials: 11.67%
Healthcare: 10.13%
Consumer Staples: 9.94%
Energy: 5.51%
Materials: 3.62%
Utilities: 2.8%

This appears to be a good starting point for a relatively diversified fund divested of fossil fuels.
 
conor20 said:
I don't want my pension to be invested in the oil and coal companies when they inevitably fall off to nothing! I've noted several coal majors going bust in the last year including Peabody Energy, the world’s largest private coal company - coal can essentially no longer compete with Solar PV for new investment. I don't want to hang around as oil and eventually natural gas companies go the same way following the Paris accord.


This is a reasonable point. Essentially what I'm looking for is something like the Vanguard High Dividend Yield ETF (which is 10.1% Oil and Gas), but without exposure to any fossil fuel companies. I've looked a lot further into this and found a much more diverse fund to those above: the iShares MSCI ACWI Low Carbon Target ETF offered by Blackrock, traded on the NYSE.

It's portfolio is well diversified:
Financials: 20.96%
IT: 15.06%
Consumer Discretionary: 13.1%
Industrials: 11.67%
Healthcare: 10.13%
Consumer Staples: 9.94%
Energy: 5.51%
Materials: 3.62%
Utilities: 2.8%

This appears to be a good starting point for a relatively diversified fund divested of fossil fuels.
Click to expand...
Hi Conor

Wondering how did this turn out for you?

I'm looking to move my pension funds to an insurer that offers funds unrelated to fossil fuels.
Any information would be appreciated!
 
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