How to Divest Your IRA from Fossil Fuel Companies

 

sustainable_investmentA few years ago, I began trying to figure out if my IRA mutual fund had stocks in fossil fuel companies. I quickly realized that information was hard to find, but after some  digging it turned out it did, and in fact most mutual funds do, since those companies are considered “Blue Chip” corporations.  I wanted to divest from “Big Oil”, since I remembered the success of the Anti-Apartheid divestiture campaigns in the 80’s, where people rallied to divest their investment accounts of large banks and other corporations that did a lot of business in South Africa…a campaign that many believed hastened the end of Apartheid in that country.  I asked my financial adviser to find me some mutual funds that didn’t contain fossil fuel company stocks, but he came back empty handed, so I did some research and finally found a small mutual fund that is entirely made up of stocks in alternative/renewable energy and recycling companies called The New Alternatives Fund (http://www.newalternativesfund.com/).  I began investing my annual IRA deposits into this fund, but it is a fairly high-risk product since it is made up entirely of stocks or “equities” and therefore is subject to a lot of variability as the stock market goes up and down.  As a result, I didn’t want to convert my entire life savings into this type of higher risk fund, so I kept my former IRA in a more traditional “balanced” mutual fund that contained a blend of equities and other lower-risk investment products, such as bonds, but I remained dissatisfied that I couldn’t find a similar so-called “balanced” fund, that didn’t contain stocks in fossil fuel companies.

Fast forward to today, where I am happy to say that divestiture from Big Oil is finally gaining traction, with many large investors, such as pension funds, universities, and wealthy investors, such as the Rockefellers (who ironically made their fortune in petroleum) choosing to take their money out of fossil fuel companies.  350.org has found a mutual fund that only invests in environmentally responsible companies.  It is called The Green Century Balanced Fund (http://greencentury.com/our-funds/balanced-fund/).  I contacted the fund through a number on the website and talked to a very helpful adviser, who sent me the forms I needed to open an account with them and then transfer my existing IRA into their fund.  It was a surprisingly simple and brief exercise (although I did have to follow up and remind them to do the transfer after I realized it hadn’t gone through in the promised time period), and now I have the peace of mind knowing I am investing in companies I feel comfortable supporting.  It also helps that the fund performs very well financially (and it is a relief to not be worrying about the dizzying drop in oil prices that is roiling the current market).  I strongly recommend others take this step to  invest in our pro-environment beliefs and our future.

 

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