Investing in socially responsible companies is one of the more popular trends sweeping through Wall Street, as investors hope good ethics can lead to good returns. Asset manager Change Finance is trying to capitalize on the trend with its new Large Cap Fossil Fuel-Free ETF. Hunter Lovins, Executive VP of Impact at Change Finance, explains how the fund is giving investors with an appetite for environmentally-friendly investments what they want.
Aligning your portfolio with your values does not come at the cost of profits, says Lovins. She emphasizes that this strategy has lower risk, because the world will eventually run 100% on renewable energy. That's why Lovins is a fan of Tesla. Elon Musk's support for Puerto Rico during the last hurricane season exemplified the potential for solar energy and Tesla's ability to help.
Wal-Mart and Wells Fargo, meanwhile, do not live up to the high ethical standards of Change Finance, says Lovins. She says she would love to hold those companies in the portfolio, but "they don't treat people all that well."
We also talk about policy's effect on investments. President Trump has not been shy about his plans to revive the coal industry. Lovins says it's just bad economics and his plans will fail. In response, she highlights the importance of helping those in the industry transition to new jobs.