ACTION REQUIRED! Sustainable Accountability

"ACTION REQUIRED!" read the email caption. "Protesters targeting several US Investor Centers", the heading continued. As a branch manager at Fidelity Investments, I received dozens of these emails over the years. The actions being required typically consisted of notifying corporate security if the protesters actually showed up (which was rare), and reviewing the company's policies for speaking to the press in case a reporter were to arrive at the scene (which was more or less forbidden).

The protesters' causes ran the gamut. There were calls to divest from countries with objectionable government policies, like Sudan. Then there were the demands to eliminate support for businesses that received ill-gotten gains (in the protesters' opinion). Tobacco, oil companies, and utilities were frequent targets. More recently, it was about sharing with "the 99%" that apparently had the time to camp out for weeks on end while "the 1%" worked for a living. 

While activists will continue to use tactics such as protests to bring attention to their cause, other forms of activism have gone more mainstream. Last year, California’s Public Employees' Retirement System and California State Teachers' Retirement System, two of the world's largest pensions, were ordered to divest from coal companies by mid-2017 through a law (SB 185) passed by the California legislature. While similar laws are unlikely to be passed any time soon in Texas, individual investors increasingly are investing with their conscious as much as they are with their wallets.

In my own experience, individual investors have historically been agnostic about how their investments went about generating profits. Over time, however, the requests for investments that fit into the customer's world view have became more and more frequent. According to a 2014 report from The Forum for Sustainable and Responsible Investment, from 1995 to 2014, the amount of assets invested in the US sustainable and responsible investing market universe increased 929%.

Nowhere is this more evident than concerns about climate change and our contributions to it. The unscientific view from my Austin Westlake window as I write this week's Accountable Update suggests that consumers are putting their money where their mouth is when it comes to sustainability. From my perch, I can count over a half dozen neighborhood homes with rooftop solar installations. On a recent drive to my office downtown, Tesla Model S drivers outnumbered Hummers 7-0.

I know that some of you readers are thinking, "Yeah, yeah, yeah, but you live in the Peoples' Republik of Austin with all the other salamander-huggers." It is true that the central core of ATX is one of the few reliably "Blue", or liberal, parts of the Lone Star State. But the west side of Travis County where I reside quickly turns "Purple" as you move towards the more conservative "Red" suburbs. If my neighborhood and commute are any indication of how the moderate middle feels about sustainability, then it suggests that the trend is, well, sustainable and likely not a passing fad.

At ATX Portfolio Advisors, Accountable Wealth Management is our practice of not charging advisory fees when our clients' accounts lose value. What may not be as well known is that we also offer Accountable Portfolios that incorporate sustainability and/or socially conscious practices. You could call it Sustainable Accountability!

When a client requests it, we will build them a portfolio with mutual funds from Dimensional Fund Advisors that emphasize those practices to address issues important to them, like sustainability. The best part is that we can do this while continuing to offer broad diversification and focusing on capturing the higher expected returns of small, value, and profitable stocks. 

If you have concerns about the sustainability or accountability of your investments, the only "ACTION REQUIRED!" is to get in touch for a free portfolio review.