SAN FRANCISCO, Dec. 9, 2021 /PRNewswire/ — Carbon Collective, the first online investment advisor 100% focused on solving climate change, launched its 2022 Climate Index, the most comprehensive list of climate solution stocks ever assembled.
As climate change exacerbates forest fires, flooding, heat waves and more, investors are increasingly in search of investments that power solutions to the crisis. Carbon Collective is meeting these demands by creating low fee, diversified portfolios with a clear theory of change for driving climate impact.
“Climate change is a solvable problem,” says Zach Stein, co-founder of Carbon Collective. “We have the technological innovation at hand, but an annual investment of $5 trillion is needed to make real change. Therefore, it’s not enough to divest, although it’s an important and necessary first step. We have to reinvest into climate solutions, and while doing so, remove as many barriers as possible. That’s why Carbon Collective created the Climate Index, which makes investing in climate solutions transparent.”
The 2022 Climate Index is centered around the comprehensive plan for solving climate change created independently by Project Drawdown, a leading resource for climate solutions. The 2022 index includes all companies that build a climate solution and generate more revenue from them than serving the fossil fuel industry. Carbon Collective analyzed more than 400 publicly-traded U.S. exchange-listed companies for consideration, with 169 equities making it into the 2022 Climate Index. These companies represent a broad set of industries such as clean energy, building efficiency, clean transportation, circular economy, food & agriculture, and health sectors, with each individual company weighted according to market capitalization. Companies that did not make the index receive more than 50% of revenues from fossil fuel companies, or have failed to adequately disclose relevant revenue and sustainability metrics.
The 2022 Climate Index is incorporated into the broader Carbon Collective portfolio, giving investors the option to include its Low Carbon Economy as an investment option for further diversification. The Low Carbon Economy is a systematic divestment from fossil fuel emitting sectors from the entire universe of U.S.-listed companies, eliminating energy, utility, industrials and materials. These four sectors account for ~19% of the market and 85% of its emissions. The Low Carbon Economy portfolio also excludes publicly-traded major financial institutions which fund fossil fuel extraction, as well as meat processing, weapons manufacturers, and private prisons. Combined with the green bond ETFs and U.S. Treasuries that comprise the fixed income allocation of the portfolio, Carbon Collective’s Core Portfolios offer members competitively performing portfolios aligned with solving climate change, for the same fees and similar risk/reward profile as generic index-based portfolios.
“The current financial industry cannot even conceive of climate risk, let alone ways to harness its collective will in order to solve an immense problem like climate change,” said James Regulinski, co-founder of Carbon Collective. “Through Carbon Collective and our 2022 Climate Index and climate-focused portfolios, we can transparently and aggressively invest in these scalable solutions quickly.”
The number of climate solution stocks on the 2022 Climate Index has increased 60% from the original companies in the index, first launched in 2021, with ten new electric vehicle companies, seven plant-based food companies, and three women’s reproductive health companies. The 2022 Climate Index’s top five companies, ranked purely by market capitalization are Tesla, NextEra Energy, Applied Materials, Zoom Communications, and ABB.
“It’s not just transparency that we see as a barrier,” concluded Zach Stein, “We also need to adhere to the best investment practices of keeping fees low, diversification, competitive performance, and eliminating investment minimums. As people build their wealth, they shouldn’t sacrifice their investment experience. We are making it as easy as possible for them to do the right thing.”
About Carbon Collective
Carbon Collective is the first 100% climate focused online investment advisor with the mission to close the annual $5 trillion dollar climate investment gap. By divesting portfolios from fossil fuels, and reinvesting that same allocation in climate solutions, Carbon Collective makes investing in climate solutions accessible to all with low fee, zero minimum, highly diversified portfolios, with 85% fewer emissions. The Company augments its investment strategy with shareholder advocacy, leveraging member’s votes to advocate for corporate climate action. Founded by Zach Stein and James Regulinski, and backed by prominent venture capital firms like Precursor Ventures and My Climate Journey, Carbon Collective is out to disrupt the finance industry and solve climate change.
For more information on Carbon Collective, please visit https://www.carboncollective.co
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SOURCE Carbon Collective