INVESTMENT APPROACH TO CORE ISSUES Climate Change By Ethan Birchard October 2, 2019 We believe there is an urgent imperative to reduce human-generated carbon dioxide emissions. Climate change can be addressed by phasing out our consumption of fossil fuels and transitioning to renewable energy sources; as investors, we have a key role to play in this transition. Prentiss Smith & Company takes a divestment approach to companies involved in the exploration, extraction, refinement, production or distribution of fossil fuels such as coal, oil and gas. This includes companies involved with hydraulic fracturing, also known as “fracking.” But while our standards include such rigorous benchmarks as the Carbon Disclosure Project and Carbon Underground 200, we further screen out companies who depend on the fossil fuel industry for a majority of their profits. For instance, we would not invest in an equipment manufacturer who largely services oil rigs or gas pipeline installers. We believe that when enough investors deprive the fossil fuel industry of the capital needed to continue business as usual, we can collectively deliver a competitive advantage to the renewable energy industry and advance the fight against climate change. We also seek out investments in clean energy companies. While we believe the long-term financial outlook for fossil fuel companies is poor, many companies that deliver solar, wind and other renewable sources of energy have strong long-term growth potential. We strive to include the most promising of these companies in our portfolios whenever possible. Additionally, we screen positively for companies that are actively working to reduce their own carbon footprint, for instance by pursuing ambitious energy efficiency targets or by supplying their own energy needs via renewable means like large-scale rooftop solar. Rewarding these positive corporate actors aligns with our pursuit of financial returns, since we find that environmentally forward-looking, sustainable companies are more likely to experience long-term growth. On the fixed income side, whenever possible we invest in green bonds that help finance large-scale sustainable energy and efficiency projects. Finally, if we hold a stake in an institution we believe can do more to advance the transition to renewable energy, we may use proxy voting, shareholder engagement or direct communication to push the institution to improve. Taken together, we believe this strategy of fossil fuel divestment, positive screening for institutions that are truly doing their part to reduce greenhouse gas emissions, and engagement with those who fall short, is the best way we can make our clients’ impact felt on climate change. For more information on how Prentiss Smith & Company considers climate change in our approach to investment, please contact us. Share this: Click to print (Opens in new window) Click to share on Twitter (Opens in new window) Click to share on Facebook (Opens in new window) Click to share on LinkedIn (Opens in new window) CLIMATE CHANGE PREVIOUS What is CDP and Why Should it Matter to Me? NEXT Diversity, Equity, Inclusion & Justice GET OUR INSIGHTS Contact Us: +1-800-223-7851 info@3.220.142.111 950 Western Avenue Brattleboro, VT 05301 Client Login Why Invest with Us? How We Work By the Numbers Frequently Asked Questions Investment Theory Ethical Investing What is Ethical Investing? Our ESG Process Core Ethical Issues About Us People Contact History Reports & Fees Policies & Disclosures News & Analysis Privacy Policy | Disclosures Copyright © Prentiss Smith & Company 2019 Lead homepage photo © Images of Vermont Legal The material contained in this website is provided for informational purposes only and should not be considered an individualized recommendation of any particular security, strategy or investment product. This web site is not intended to be used as a general guide to investing, or as a substitute for personalized investment advice, and it makes no implied or express recommendations concerning the manner in which any specific client account should be handled. If you have questions regarding the applicability of any issue discussed on this website to your own situation, you are encouraged to consult with a professional advisor of your choosing. Prentiss Smith & Co is neither a law firm nor a certified public accounting firm, and no portion of this website content should be construed as legal or tax advice. No guarantee is made as to the accuracy, completeness or timeliness of any information, projections or opinions contained in this web site or upon which any such projections or opinions have been based. The information contained in this web site is compiled for the convenience of site visitors and is accepted by the site visitor on the condition that errors or omissions shall not be made the basis for any claim, demand or cause of action. Due to factors that may include changing market conditions or applicable laws, some content on this web site may no longer be reflective of our current positions or opinions. Some information on this site has also been obtained from published sources and/or prepared by unaffiliated third parties. While such sources are believed to be reliable, neither Prentiss Smith & Co nor its respective employees or representatives assumes any responsibility for the accuracy or completeness of such information. Hyperlinks to other web sites are not an endorsement, approval or certification of information, projections or opinions located at such web sites. Investing in securities involves risk, including the loss of all principal invested. Other types of investments involve varying degrees of risk. There can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Prentiss Smith & Co), will be profitable or suitable for your portfolio or individual situation.