Catching my attention this morning:
U.S. mutual funds are ignoring the business risks of global climate change, said a report on Monday that criticized the industry for abstaining from or opposing shareholder pressure for environmental disclosure.
My immediate reactions was a resounding "SAY WHAT?" Why should mutual fund managers care about the environment? Unless, of course, it makes their investors money.
I'm not against mutual funds targeting environmentally sound companies or companies making environmentally sound decisions at the request of shareholders. But in the end, a mutual fund managers should have one goal--make money for the investors.
None of America's 100 largest mutual funds voted in 2006 in support of resolutions seeking greater corporate disclosure on how global climate change will affect business, said Ceres, a coalition of investors and environmentalists.
"Mutual funds are a critical missing link in the push for better corporate disclosure about climate risks and opportunities," Ceres President Mindy Lubber said in the report.
"Mutual funds are ignoring that climate change will have far-reaching impacts on numerous business sectors, whether from rising insurance losses from natural disasters, compliance costs from new carbon-reducing regulations or growing global demand for climate-friendly technologies," Lubber said.
Money talks. If investors started moving money away from funds consisting of companies that aren't disclosing into funds with companies that are, I bet more companies would start disclosing and more fund managers would choose such companies. Corporate environmental responsibility is not going to be, nor should it be, driven by the goodwill of CEO's, but rather through demand for responsibility by investors.
That's why I have most of my retirement investments with one of the financial services companies CERES holds up as an example--TIAA-CREF.
Alright, that's a lie. I had no idea of TIAA-CREF's stance on environmental issues when I chose them. Hmmmm...now that I think about it, I wonder if that's hurting my returns?
