Investment Strategies for In Reducing Carbon Exposure Chris Gauthier, CFA Stonehearth Capital Management Chief Investment Officer 2018 Stonehearth Capital Management, LLC is a Registered Investment Advisor. Registration does not imply a certain level of skill or training.
WHY DIV IVEST OR REDUCE FOSSIL IL FUELS IN IN YOUR PORTFOLIO? • Align your investments with your values • Reduce financial risk of fossil fuels “ Do your little bit of good where you are; it’s those little bits of good put together that overwhelm the world” - Archbishop of South Africa Desmond Tutu Stonehearth Capital Management, LLC is a Registered Investment Advisor. Registration does not imply a certain level of skill or training.
ALIG IGN YOUR IN INVESTMENTS WIT ITH YOUR VALUES • Climate change poses human, environmental and economic threats. • The threat is not in the future. Climate change is happening now. • You and your family can express your concern about fossil fuel industry’s role in climate change . • You can take concrete action that is part of a larger movement Stonehearth Capital Management, LLC is a Registered Investment Advisor. Registration does not imply a certain level of skill or training.
REDUCE FIN INANCIAL RIS ISK OF FOSSIL FUELS • Fossil fuel companies are valued partially based on the reserves they hold being brought to market in the future. The assumption is that all assets will be extracted, sold, and burned. • Fossil fuel industry has five times more CO2 in coal, oil, and gas reserves than can be safely burned to not exceed scientifically accepted levels.* • If carbon emissions are taxed or capped, reserves may no longer be assets for the company. • Investors could be left holding these devalued assets. *http://gofossilfree.org/faq/. Scroll down and click “What does ‘Do The Math’ Mean?” Stonehearth Capital Management, LLC is a Registered Investment Advisor. Registration does not imply a certain level of skill or training.
HOW DO IN INVESTORS DIV IVEST OR REDUCE THEIR FOSSIL FUEL EXPOSURE? Positive + Negative Screening, Positive Screening, 4% 3% Engagement, 4% Portfolio Footprinting & Analysis, 15% Negative Screening, 61% Low Carbon Index, 13% Source: MSCI ESG Research Stonehearth Capital Management, LLC is a Registered Investment Advisor. Registration does not imply a certain level of skill or training.
WHAT IS IS CARBON FOOTPRINTING ? • The carbon footprint of a fund is calculated by tracking and measuring the greenhouse gas emission of all underlying companies in a portfolio • Carbon Emissions data is provided by yourSRI & South Pole Group • Expressed as amount of carbon dioxide equivalents in tonnes and is written as tCO2e Source: Fossilfreefunds.org/carbon-footprint Stonehearth Capital Management, LLC is a Registered Investment Advisor. Registration does not imply a certain level of skill or training.
WHY CARBON FOOTPRINTING? • Allows for portfolio comparison • Quantifiable & Measurable • Ability to control for concentration risk Stonehearth Capital Management, LLC is a Registered Investment Advisor. Registration does not imply a certain level of skill or training.
SCM’S CARBON LIGHT PORTFOLIO • Reduce carbon footprint of assets • Maintain similar risk profile to our standard risk models • Similar expense ratios as our standard risk models • Maintain the Ability to Meet Clients’ Financial Goals Stonehearth Capital Management, LLC is a Registered Investment Advisor. Registration does not imply a certain level of skill or training.
SCM’S CARBON LIGHT CONSERVATIVE PORTFOLIO CARBON LIGHT CONSERVATIVE DIFFERENCE CONSERVATIVE Fixed Income 55% 55% 0.00% US Equity 17% 17% 0.00% International Equity 8% 8% 0.00% Alternative 19% 19% 0.00% Rixtrema Score 45 44 1 Expense Ratio 0.46% 0.54% 0.08% Carbon Footprint 54 16 -70.37% Stonehearth Capital Management, LLC is a Registered Investment Advisor. Registration does not imply a certain level of skill or training.
SCM’S CARBON LIGHT MODERATE PORTFOLIO MODERATE CARBON LIGHT MODERATE DIFFERENCE Fixed Income 22% 22% 0.00% US Equity 34% 34% 0.00% International Equity 28% 28% 0.00% Alternative 15% 15% 0.00% Rixtrema Score 61 59 2 Expense Ratio 0.45% 0.55% 0.10% Carbon Footprint 145 62 -57.24% Stonehearth Capital Management, LLC is a Registered Investment Advisor. Registration does not imply a certain level of skill or training.
SCM’S CARBON LIGHT AGGRESSIVE PORTFOLIO CARBON LIGHT AGGRESSIVE DIFFERENCE AGGRESSIVE Fixed Income 0% 0% 0.00% US Equity 47% 47% 0.00% International Equity 37% 37% 0.00% Alternative 15% 15% 0.00% Rixtrema Score 71 69 2 Expense Ratio 0.42% 0.55% 0.13% Carbon Footprint 188 84 -55.32% Stonehearth Capital Management, LLC is a Registered Investment Advisor. Registration does not imply a certain level of skill or training.
Questions & Answers Required Disclosure This communication is not an offer to sell, or solicitation of offers to buy, securities. Investments entail significant risks and are suitable only for certain investors as part of an overall diversified investment strategy. Past performance is not an indication of future results. All statements made herein speak only as of the date they were originally made. Information included herein does not constitute investment advice and should not be viewed as current or past recommendation to buy or sell any securities or adopt any investment strategy. Please do not send trade or check requests through email. Stonehearth Capital Management, LLC is a Registered Investment Advisor. Registration does not imply a certain level of skill or training. Stonehearth Capital Management, LLC is a Registered Investment Advisor. Registration does not imply a certain level of skill or training.
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