The philosophy behind using ETFs is that you will hold shares in many large, global companies. This allows for greater diversification of your investment, lower fees and better liquidity. But it also means focusing our efforts on advancing the sustainable practices of the companies that have the largest impact on the planet.
🍃 Your Grünfin climate investments are in companies aligned to or doing better than the goal of the Paris Agreement. This may mean corporations operating factories fully with renewable electricity or companies approaching net-zero emissions across their supply chain years before the 2050 target.
🍃 We, of course, invest in solar panel manufacturers and wind energy producers as they are critical for sustainability. We must give them the necessary capital to produce, scale and innovate.
🍃 Your investments include sectors like clean energy, healthcare, consumer goods, financials, communication services and tech.
Because let’s get real. To save the planet, all industries and the world’s largest companies must step up as part of the solution.
🌱 How does my voice get heard?
To impact companies in our portfolio, we must engage with them directly. By doing so, we can have a profound effect on the environment as well as our planet.
As an individual shareholder, your power is limited. However, there’s strength in numbers. If we collectively come with billions or trillions in assets, even the largest companies will listen.
🍃 We joined forces with ShareAction, a UK non-profit that leads investor coalitions with assets in the trillions to engage with and collectively back calls on companies to act on climate change, workforce conditions and public health.
🍃 Our ShareAction coalitions submit proposals for shareholders of the world’s largest companies to vote on the matters you care about.
🍃 We meet with the senior management of the world’s largest companies to push for positive change.
🍃 We engage with our ETF managers so they vote in favor of proposals important to you.
🍃 We sign investor statements urging companies to act on positive change.
🍃 We engage with ShareAction to recommend proposals.
🍃 We engage with index creators to discuss eliminating a stock we don’t like.
🌱 How are the funds chosen to my Grünfin portfolio?
We believe in a long-term, low-cost, well-diversified, and values-based investment strategy. We’ve chosen to build our client portfolios from the world’s best sustainable Exchange-Traded Funds (ETFs). We view investments in the major market indices through the lens of Environmental Social and Governance (ESG) and the UN Sustainable Development Goals (SDG).
We carefully choose sustainable ETFs that need to satisfy our criteria in the following areas:
🍃 Sustainable Finance Disclosure Regulation SFDR Article 8 and 9 - Our climate-themed portfolio consists exclusively of funds classified as Article 9, meaning they have a sustainable investment objective. We are working hard to also offer Article 9 funds for our gender equality and health portfolios, but fund availability is quite limited today. Equality and health are Article 8 funds, which promote sustainable characteristics but not as overarching objectives.
🍃 Preferably Morningstar Sustainability Rating of 4 or 5 and MSCI Sustainability Rating of A or higher - We rely on more than one objective, global third party to rate our funds.
🍃 Emissions in tons of CO2 equivalents per million USD turnover - Healing the planet requires all major corporations to reduce their carbon emissions. The lower their CO2 footprint the better!
🍃 Green vs brown revenue - Green revenue (e.g. solar energy) is good, brown revenue (e.g. oil) is bad.
🍃 % of women on board - Corporate boards make key decisions like setting a company's strategy. Since half of the world is women, we aim for funds that are closest to this representation.
🍃 % board independence - Corporate boards should be independent from a company's management team so that they can keep management accountable for the success of the company.
🍃 Global rank - We aim to offer you highly-ranked funds within the global universe of those covered by the ratings provider MSCI.
🍃 Not being complicit in human rights abuses - We want for you to own funds with 0% exposure to companies facing very severe controversies on human rights.
🍃 Specific exclusion of controversial weapons and tobacco companies - We screen out funds exposed to companies involved in landmines, chemical and biological weapons. We also exclude tobacco producers.
🍃 Low fees - Imagine the trading fees your bank would charge if you bought 3.400 positions! The fees would surely sum up to thousands of euros. Whereas in the case of our ETFs, the average annualized cost is 0.22% of the amount you invest, yet you are still exposed to up to 3.400 positions.
🍃 Passively managed ETFs or index funds - ETFs passively track an index, whereas actively-managed funds continuously decide which stocks to buy and sell. Turns out active management funds are really bad at selecting stocks. Only 6% of US active funds outperformed their passive index over the last 20 years.
🍃 Euro denominated - We only buy funds in EUR so that you don't have to worry about sending us different currencies.
🍃 Non-dividend distributing - At Grünfin we only invest in ETFs that don’t distribute dividends, to reduce the risk of triggering a taxable event for you. The companies inside the ETF still pay dividends which are credited to your position, but are automatically reinvested inside your ETF holding.
🍃 Fund’s liquidity: ETFs can be purchased or sold on a stock exchange the same way that a regular stock can with immediate liquidity.
Match your money with your values, and join our exciting journey to a more sustainable world!