Coal is a huge problem for climate change
Coal-fired power plants release more greenhouse gases per unit of energy produced than any other electricity source. Burning coal is also economically inefficient – and coal is likely to become more expensive as countries pass more carbon pollution regulations. Meanwhile, rapid cost declines in renewable energy have made clean renewable energy the United States’ cheapest available source of new electricity.
What does this mean for retirement savers and investors? It means coal-fired power companies could be at risk of “stranded assets”. In other words, as we transition to a low-carbon economy, there’s a good chance that money invested in coal infrastructure won’t make a return on investment.
And that’s reason to be skeptical of putting your savings in coal-related stocks. It’s like seeing the invention of the smartphones, and deciding instead to invest in pagers and fax machines.
30 dirty coal-fired power companies
How do you keep the worst polluting coal companies out of your portfolio? We’ve partnered with Macroclimate® to make it easy.
Macroclimate® has developed a list of the largest public-company owners of coal-fired power plants. Last year we integrated this data into our Fossil Free Funds platform, allowing you to see if the mutual funds in your 401(k) own stock in these coal companies. As of August 2018, this list has been updated to focus on the 30 worst offenders.
Tracking investments in coal
Coal-fired utilities are frequently found in funds offered by the biggest financial firms. Looking at investments by U.S. mutual fund managers in the list of 30 coal-fired utilities, we found that Vanguard is the #1 investor in four out of five of the dirtiest coal utilities. BlackRock, American Funds, and SPDR State Street also show up as top investors for multiple companies.
| MACROCLIMATE 30 | U.S. MUTUAL FUND MANAGERS | ||
|---|---|---|---|
| Top coal-fired utilities | #1 investor | #2 investor | #3 investor |
|
#1 NTPC Limited (India) |
T. Rowe Price | Vanguard | BlackRock |
|
#2 Huaneng Power International (China) |
Vanguard | BlackRock | American Funds |
|
#3 Southern Company (USA) |
Vanguard | Franklin Templeton Investments | SPDR State Street |
|
#4 American Electric Power (USA) |
Vanguard | American Funds | BlackRock |
|
#5 Duke Energy Corp (USA) |
Vanguard | SPDR State Street | BlackRock |
* Data as of August 2018. Top U.S. mutual fund managers for each utility identified by summing equity ownership of the company across the fund manager’s U.S. open end and ETF portfolios.
What can you do about it?
Do you use Vanguard, BlackRock, or another major fund manager to manage your finances?
If so, you can use Fossil Free Funds to look up your funds and find out if your money is being invested in the most-polluting coal power plants. If you don’t want your money funding dirty coal, you can find sustainable, socially responsible alternatives that prioritize clean energy investments
Don’t think it’s enough to look at just 30 of the dirtiest utilities? Good news! Fossil Free Funds also shows you investments in any fossil-fired utility - not just coal but also natural gas, another fossil fuel contributing to climate change.
Get started today at fossilfreefunds.org!
