Reducing environmental impact through targeted investing.
At New Covenant Trust Company, we’ve seen record levels of capital flowing into environmentally focused investment strategies in recent years, which has resulted in a sharp increase in corporate attention, disclosure and participation on sustainability issues. Heightened interest in socially responsible investing has made quite an impact, and we’re proud to be part of those efforts.
That’s why we offer a targeted investment strategy that takes into consideration values related to climate change and fossil fuels.
Our fossil fuel free strategy is an add-on element of our core equity portfolio, a separately managed account (SMA) model of individual stocks designed to track the S&P 500.
The primary goals of this model are to:
- Track the S&P 500 index as closely as possible, using select divestment screens
- Minimize investment fees and trading costs
- Allow investors full control over the companies, categories and sectors in their portfolio
The strategy starts with Presbyterian Church (U.S.A.)’s MRTI divestment criteria, which screens for military and civilian weapons, tobacco companies, for-profit prisons, gaming, alcohol and human rights violators. For investors concerned with fossil fuel emissions and climate impact, we offer an additional fossil fuel divestment overlay, which can be configured to exclude the entire energy sector and other firms with a high carbon footprint.
The result is a 102-stock portfolio that is sampled and market-cap weighted, with a sector profile matching its index. It is reconstituted annually.
Using ISS Ethix, one of the largest databases of social and environmental metrics, we can also add positive and negative screens on other environmental criteria, such as conservation efforts, greenhouse emissions or clean energy solutions.
If you’re looking for a customized approach to investing that aligns with your environmental values, we’re here to help you realize your goals.