In this episode, I have an interview with Zach Stein a Cofounder of Carbon Collective. The goal of the Carbon Collective is to help use investments to solve climate change. They divest from fossil fuel companies and reinvest in climate solutions. They work with individual investors and 401k’s.
Carbon Collective currently has a robo-advisor platform for green investing and they are working to launch an ETF in 2022. They currently charge 0.25% of the account value per year which is the industry standard for robo-advisors.
You have the option of selecting the stock/bond ratio that you want.
Investing to solve climate change
The goal is that the investments will help solve climate change. By divesting in companies fueling climate change, they are not investing in the companies (about 20% of the market) that is responsible for about 85% of CO2 emissions from all publicly traded companies.
They reinvest the portion of this portfolio in companies solving climate change. This includes solar, to batteries, to home insulation companies. They offer a Climate Index that has more than 100 companies building solutions.
They are working to pressure the other companies in their portfolio to decarbonize. Using shareholder advocacy to encourage this portion of the stock market to transition to use only clean energy, electric vehicles, and run CO2-free without changing their core business.
In some theories of ethical/impact investing, advisors and fund managers take a “seat at the table” approach to fossil fuel companies. Arguing that it’s important to hold their stock in order to engage these companies directly on issues like climate. The Carbon Collective completely divests from fossil fuel companies and works to impact the other companies in their portfolio.
Why Divesting Matters: Carbon Collective is working to convince fossil fuel company corporate customers to decarbonize and make their extraction operations as expensive as possible by divesting. Divesting increases the supply of available fossil fuel shares. As share demand fluctuates, this higher available share count makes it easier for share prices to fall, which in turn, makes it more expensive for fossil fuel companies to raise capital for expanding their operations.
They can be found at: carboncollective.co