How to Influence Climate Change (and Other) Policies With Your Portfolio


You might be well aware of how you can effect change by being selective about which companies you patronize—or don’t. After all, each week seems to bring a new trending #boycott, depending on what United, Uber, Starbucks, Snapchat, Pepsi— did we mention United? —or some other company and its executives have done to outrage the public.

But where you do or don’t invest your money can be just as powerful, or more.

“When you think about consumer activism, it’s democratic: Everybody has a voice, everybody has a vote,” says Natasha Lamb, managing partner and director of equity research and shareholder engagement at Arjuna Capital . “With investors, it’s very much the same. You can vote with your dollars; you can move your money; you can press for change.”

Look at how activist investors pushed for change at ExxonMobil. In its annual meeting in May, 62.3 percent of shareholders voted in favor of greater transparency on the risks the company faces in light of climate change policies. That goes against the stance taken by Exxon management , which argue the company’s already doing enough. “The votes are advisory, but they carry a lot of weight,” Lamb says. “Even if you have just a quarter of shareholders saying the company should be managing climate change better, the company’s management for the most part are going to take heed.”

Don’t you need to invest a lot of money to have a say?

It’s true that the activist investors on the Exxon vote likely include heavy hitters like financial firms BlackRock, Vanguard and State Street (though the specific votes are not made public), which are the company’s biggest shareholders, owning more than 18 percent of the stock. But don’t underestimate yourself.

If you own even one share of a company, you’re a partial owner, which gives you a seat at the table to push for policies that are important to you, whether by opening a dialogue with board members, voting on resolutions or submitting your own proposals. “ Every investor can make an impact,” Lamb says.

Isn’t investing just about making money, though? Why should my beliefs matter?

Your financial plan can be about more than just dollars and cents. “Identifying what you value can help you shape your financial goals...and navigate what type of financial strategy is appropriate for you,” says Certified Financial Planner Ariel Anderson.

For example, if you value stability, settling down and becoming a homeowner might be a financial goal. If you value health and wellness, you might carve out a good portion of your budget for healthy foods and fitness related expenses. Similarly, if there are some issues you really care about—anything from human rights to religion to gender and cultural diversity in business—you can integrate them into your financial plan, too.

So how do I get started?

In addition to incorporating your values into your everyday spending and long-term goals, you can consider aligning your beliefs and investments by investing in companies that support your issues. For example, sticking with environmentalism, you might invest in Tesla or other eco-friendly businesses. Or you could take a stake in a firm that plays a big role in your issue of choice, like Exxon with climate change, to try and push them in the direction you want.

Generally, it’s a good idea to do this by selecting socially responsible mutual funds and exchange-traded funds or funds that contain the firms in which you want a stake (and a voice). In contrast to individual stocks, this allows you to diversify and spread out your risk at a relatively low cost, Anderson says.

“Just take a look at your [overall] financial situation holistically before you put [money] into a cause that resonates with you,” she adds. “Your own financial security is paramount. Being able to support other causes that are important to you is supplementary to that.”