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Posted on Aug 19, 2017

Carbon Balance Your Portfolio

We often think of our carbon footprint as only pertaining to our annual living experience; our homes, cars, and airplane travel. This can be calculated using the EPA Carbon Calculator. Another aspect of our lives may cast a much larger footprint and it may be much easier to balance. According to the Morgan Stanley’s MSCI ACWI, on average, we have 1.51 tons of a carbon footprint for each $10,000 invested in the stock market. Fossil Free Funds is a handy site for tracking the footprint of investments funds. When we realize how much we need to save for retirement or college tuition, it is easy for our investment footprint to eclipse our annual living footprint.

Solution

Fortunately, there is a process called Carbon Xprint where we can use investments to balance our investment portfolio’s carbon footprint. We can balance each ton of carbon footprint by investing $40 in certified clean energy investments. These investments are certified by widely accepted bodies such as; Green Bond Principles, Climate Bonds Initiative, Passive House, Moody’s Investors Service, and Investor Confidence Project. The money is used for capital to finance clean energy projects. These projects create renewable energy, energy storage, and energy efficiency.

The technologies will be forever changing or improving but we will always need capital for project financing. A carbon balanced portfolio can be achieved with just an average annual investment of .6% of our stock portfolio. Prudent investing requires a certain amount of diversification. Why not diversify into clean energy project financing? As these investments mature, they can be reinvested so over time one can sustain a balanced portfolio with little or no additional investment.

Any size entity from the smallest investor to the largest institutions can utilize this process.

This simple diagram demonstrates the process.

 

The Carbon Xprint process gives investors a quantifiable tool to balance their carbon footprint. This action leads to an increase in the demand for certified clean energy investments. This will then increase the issuance of these investments leading to an increase in the deployment of clean energy technologies. These clean energy projects will then reduce the risk of the catastrophic effects of climate change.

The Carbon Xprint Process provides an opportunity for an individual or an institution to meet their investment and their sustainability goals. The process is free. According to Bloomberg, green bonds issuance continues to increase yet we need trillions of dollars to solve this problem. No one entity can save the world but with Carbon Xprint any size investor can cover their own tracks and still make money.