Being a sustainable investor can also entail to be a sustainable consumer - how do you align as many areas of your life with your personal values as possible? And what is a wind powered lawn mower?

How to select your Halloween candy based on Impact.

Take an Impact Assessment.

forty4financial.com

Today we will talk about the wind powered lawn mower – or more specifically, how this term can reflect being sustainable in your day-to-day life. Being a sustainable investor, can also mean trying to align other aspects of your life with your values through being a sustainable consumer.

For me, mowing my lawn is something I like to do – it is a way of getting some fresh air, and allowing the mind to wander. Although I do aim, purely for the fun of it, to make my way around the yard in a way I have never done before, even just a minor difference, it does not require much thought. Meditative activity of sorts.

Well, the basis of the story is my battery powered lawn mower. And since I source my electricity from renewable sources, in my case wind and solar, I like to say my lawn mower is wind powered. If nothing else, it has brought a chuckle or two from a neighbor passing by to chat.

My focus on sustainable investing involves screening for fossil fuel exposure in the portfolios I manage. Making my own electric consumption fossil fuel free is a small additional step. Depending on which region and power company you are associated with, you may have the option to choose your own electricity producer. The power itself will still be delivered through your local utility, although they will no longer generate the electricity, and instead buy it from the chosen producer.

I have several renewable producers to choose from, and chose one that solely use wind and solar. I am not a fan of nuclear power, although it is fossil fuel free, due to the issues with the waste and potential significant safety concerns. Likewise, I choose to stay away from hydropower, which can also be classified as renewable, as it involves changing the natural flow of water in a way that can be a major disruption to wildlife in and out of the water. I currently do pay a small premium compared to the standard utility rates in my area, but it is worth it to me. Over time, I think this premium will decrease, as renewable energy is becoming cheaper, and the cost of conventional sources, natural gas in particular, is trending higher.

Of course, you can take your power generation a step further and install solar panels on your roof, and it may even be a good investment as well, depending on your home’s location and sun radiation. With the recent Inflation Reduction Act, there are potential tax credits and other financial support available to new installations, that further makes it worth a look. It is something I am considering at the moment – and I may get back to the outcome in a future episode.

As part of the mission of Forty4 Financial, I do what I can to reduce my own environmental footprint through conscious consumption of supplies and energy. For the parts that I can’t eliminate, I have purchased carbon offsets, to try to reverse my emission through a carbon sequestering project – and I am proud to say that I am coming up on my 2-year anniversary of being carbon neutral. It is a small thing by itself, but I hope other small businesses join the effort and together we can make a difference.

Being a consumer, you weigh several different aspects in your daily purchasing decisions, things such as price, availability, convenience, etc. In a recent blog post, you can find the link in the notes, I took things a step further, and looked at the company behind the products when making my Halloween candy decisions. I measured two of these companies on their overall carbon footprint, on equal pay, and on responsible water usage.

It was quite interesting, and surprised me in the power I felt it gave me, making what seems like a miniscule purchase of a couple of bags of candy feel bigger, and aligned with my values.

I think that is honestly one of the powers of sustainable investing, namely starting a conversation with others, and in particular yourself, about what matters to you, and different ways to support those values. It becomes quite powerful as you live those values in as many areas of your life as possible, creating an impact in many different forms. Each may be small, but when aggregated, it has the potential to become meaningful – even more so if you can inspire others to do the same.

Sustainable investing by itself has its limits as to how much it can move the needle. One of the ways it works, is that it may make financing new projects more attractive for companies that meet the sustainable thresholds, compared to those that do not, thereby over time creating more attractive investments and a move towards more sustainably focused business practices and decision making.

A more direct way, and one I pay quite a bit of attention to, is that of active ownership. That is whether the investment companies you invest through are using their voting power and their voice to influence companies to make more sustainable decisions.

If you own individual shares, you will receive notifications to vote for various agenda items. You can then research these different things that are up for a vote – and it may not always be the best option to vote with the management suggestions – as an active shareholder, you want to be able to exert a level of direction or control with those things that are important to you.

If, instead, you invest through mutual funds, you then give the fund manager the right to vote on your behalf. A mutual fund is an investment vehicle consisting of a portfolio of stocks, bonds, or other securities, overseen by a professional money manager, and amazingly, not all fund managers exercise this right to vote. Taking a look at their voting record, both how often they vote, and how they vote, can be part of the due diligence when choosing the right investment options for you.

You may think that your votes don’t count, because you are a small shareholder of a big company. However, just like making small changes to your daily life can aggregate to something bigger, your votes do as well. When combining with others, the total vote count can shift direction or mandates for these large firms. Not everyone votes, so you may not even need a majority of all the shareholders to make a certain change happen. In addition, many fund managers that have a values alignment have formed alliances to pursue a more effective form of shareholder activism, thereby making their voice heard a bit louder.

All told, there are several different ways to create an impact, from choices of consumption, lifestyle adjustments, political involvement, volunteering and philanthropy. If you would like to see how you may be able to align your investments with your values, reach out to me for a complimentary assessment to get you started – the link is in the show notes.