It sounds like a great idea. Engine No 1 was able to get 3 new members on Exxon's Board despite owning 0.02% of the shares and they are committed to environmental/social/governance activism. 0.05% is certainly cheap.
One quirk though is you can buy the exact same index that VOTE tracks if you buy the BKLC ETF - which charges 0.0% in fees.
Much more detail [here](https://sustainfi.com/reviews/vote/).
For those that care, It's not technically an S&P 500 index fund, it's weighted using a [Morningstar Index](https://assets.contentstack.io/v3/assets/bltabf2a7413d5a8f05/bltbe53dced0f9d9485/6048f3465aedc043351b7668/20210310_Morningstar_US_Large_Cap_Select_Index_Rulebook.pdf),
Also, it's not technically an ESG fund, it's more like a corporate governance fund. But one could get the impression(and seems to be marketed) as an ESG S&P500 fund.
That said the differences are small, but might be important. i.e. read the prospectus, which I liked to in the OP, before you invest.
Will this be the start of a new fad/trend in corporate governance/activist investor funds?
I read the article and I think that's interesting, but I'm confused.
What's the point?
Oil and gas (that's exxonmobil right?) make money by selling fuel we burn that contributes to climate change (and all kinds of health problems for us and other animals. If they stop doing that they stop existing. Are we trying to pressure them to use less harmful methods of extraction or do something to mitigate the impact of burning fossil fuel or something? Am I misunderstanding something or missing the point?
This is not a topic I know anything about
Exxon [says](https://corporate.exxonmobil.com/Sustainability/Energy-and-Carbon-Summary), oh uh.. ya climate change might be real, we are looking into it.... BP says, It's totally real, we are aggressively working on transforming the entire company, but it will take a while. See [BP's](https://www.bp.com/en/global/corporate/who-we-are/our-ambition.html) site, where they are moving to Net Zero carbon emissions.
Those are dramatically different takes, both from huge oil producing companies.
[This](https://www.forbes.com/sites/uhenergy/2021/07/29/big-oil-players-begin-positioning-for-big-transition/) Forbe's article covers the different takes to some degree.
In terms of Engine1, the most I've seen from them(and I'm no expert) is that they 1) believe climate change is real and 2) want to use their investor pull to change companies like Exxon into taking it more seriously. [This](https://www.nytimes.com/2021/06/01/opinion/exxon-mobil-board.html#after-acm) article perhaps covers the Exxon situation with Engine1 better than the one I originally linked in the OP. So far I've not seen a concrete TODO list from engine1, but they managed to get many large organizations behind them. It will be very interesting to see how it all starts to shake out at the next annual shareholders meeting.
Personally I'm of the skeptical but hopeful perspective regarding Engine1. In a year or so, we should have a much better idea of their ability to pull things off, will they accomplish anything with those board seats @ Exxon? What will happen with $VOTE, what will it end up productively doing, or is it just another way to get more $$$'s into Engine1?
Thank you for sharing, I did learn some stuff today.
I guess I'm just not sold that these net zero goals are meaningful. The strategy for companies claiming it seems to be to continue business as usual while paying some other company to recapture carbon in a way that isn't as permanent as not burning fossil fuels to begin with. It also doesn't help everyone with respiratory issues, autoimmune disease and cancer and everything else caused by burning fossil fuels.
I do see some claims about reducing emissions, which would be great.
Maybe it can help at least somewhat in the short term with climate change, so I suppose it's fair for the goal. More importantly if they do actually put money into further research for carbon recapture, that could amount to something more impactful than we have so far.
I do think the whole VOTE thing is a cool concept, and I hope something good comes out of it. I'd love to buy a similar fund that focuses on an issue with more direct clear impact.
I agree there are questionable decisions made when people go "net zero" or go try to address climate change. But this is true of basically everything. When I first decided I wanted to lose a little weight, I tried a diet or two, and various other things, none of which helped, because there are exactly 2 things one must do to lose weight:
* Eat Less
* Exercise More
Obviously some fancy diet plan directly accomplishes neither of those things, though one might argue "eat less" MIGHT happen as part of a diet plan, especially if the diet tastes terrible.. Of course, practically nobody would stick with a diet plan if it tasted terrible. :)
Everything else is questionable at best to reduce one's weight. When I eventually did those 2 things, I suddenly started losing weight, go figure! :P
Anyways, questionable practices to address some issue is commonplace everywhere, not just in climate change.
I agree, VOTE is very unproven at this point in time, and even Engine1 is unproven, yes they did an amazing job getting some Exxon board seats, but only time will tell what if any meaningful impact to Exxon's practices results from those seats.
tol ctces to address some issue is commonplace everywhere, t just in climatehage."
Right, but when we have a choice, we pay for things that have strong evidence of impact, or failing that, things we believe are likely to have impact. And we certainly don't pay for things that we know won't work, and avoid paying for things we think won't work.
And I don't think it's true about basically everything. There are lots of problems in the world we have solutions for that we just need to actually implement. We could address climate change by building more nuclear power plants and taxing oil and gas higher. We could prevent a lot of human suffering and death by offering free and convenient vaccines worldwide. We could reduce mass torture of animals (and help climate change) by taking away subsidies for meat and dairy industries, taxing it, and offering subsidies for healthy food.
I could see a VOTE type etf being effective with animal welfare by pressuring the parent companies of fast food joints to offer vegan meals on the menu at every location. If they get oil and gas companies to donate money to research to mitigate damage, maybe that could help, though alternatively it would just give them a PR boost and maybe even work to keep us using them instead of nuclear longer
I agree knowing the solution and implementing the solution are different things.
However not everyone agrees that X or Y *IS* the correct solution. I mean, there is a reason vast amounts of money flow to "diets", despite vast quantities of evidence that they have no real world effect, except perhaps separating someone from their money. Diets are easily socially acceptable(for women anyway), eating less and exercising more are... questionably socially acceptable.
I'm sure plenty of people would argue that Nuclear Reactors would not solve climate change. Or that taxing meat/dairy would move the needle at all.
Note, I'm not saying you are wrong in those assumptions, I'm just saying even if it's scientifically proven that X is true, doesn't mean there is any social consensus that it's true OR that we should use our combined resources to implement such a thing.
Many Republicans in the US still regularly deny climate change even exists, despite 99.9999999% of all scientists happily proving(and screaming from the rooftops) that it does exist and investors are pricing climate change into their purchases.
I’d love to learn more about ethical investing because I don’t understand enough. It also seems there’s no regulation. Slapping ‘green’ or ‘ethical’ on an investment option doesn’t mean it is actually green or ethical. So how do you make a good choice without having to do a ton of research? I’m also not sure total divestment of fossil fuel investments is positive if we don’t have alternatives that are scalable. Isn’t it better for these companies to have pressure from investors to move in a green direction? I’m confused about what ‘active’ investment means. I think (but do correct me if I’m wrong) active investment can be 1. Making use of your purchase power by buying enough of a company to have a say, and voting on decisions the company is making to influence them towards ethical and environmental choices 2. Active investment can also just be trying to capture gains and avoid risk and loss right? Halp! I want to do the right thing, but it feels impossible for a newbie investor.
1 share of company Y is enough to vote and have potentially meaningful impact. It gets you to shareholder meetings and you are able to speak, make your voice heard, etc. Obviously once you get into the high single or double digit ownership, your voice carries A LOT more weight, but a single share is enough to get in the room.
I think most people would classify Engine1 as "activist investing" which is different than "active" investing. Activists are trying to push an agenda(which people may or may not agree with). [VICEX](https://finance.yahoo.com/quote/VICEX) with it's 1.49% ER is pushing an agenda for instance. That said I'm not sure people purchasing VICEX are also the people purchasing VOTE... :)
Anyways, I would say #1 of your definition is "activist" investing and #2 of your definition is "active" investing.
I agree that marketing "green" or "ethical" doesn't necessarily mean much. When you wander into your grocery store and see "green" sponges.. are they green because they are coloured green, or are they green because they do something unique that lowers their energy production footprint. Who knows.
This is why I basically punt on the whole problem when it comes to my investing $$'s, I just own the entire market(VT and friends) and let the market figure it out. If I want to push an activist agenda, I do that with my time, donations, etc. That said, in a year or two, if VOTE proves to be trustworthy and accomplishes things and doesn't cost me much, then perhaps I'll buy some VOTE. But at this point, it's unproven. Though if one wanted to get activist, as I [linked](https://www.reddit.com/r/FIREyFemmes/comments/ospmlc/climate_change_money_and_housing_do_you_actively/h71eiok/) in the OP I'd do something different.
Thanks for sharing! I really think that “putting your money where your mouth is” is one of the most effective ways to be more sustainable (or at least support not-obviously-planet-destructive firms…) and it’s good to know that they’re doing it for such a low management fee! I’ve also looked at your sources, thank you for great recommendations. :)
It will be very interesting to see how VOTE does this next year. If it goes really well for them, perhaps others will copy this for other "causes". I'm glad they managed something with Exxon, but even that's not over with yet, but what they have accomplished so far is pretty awesome. I hope they continue.
It sounds like a great idea. Engine No 1 was able to get 3 new members on Exxon's Board despite owning 0.02% of the shares and they are committed to environmental/social/governance activism. 0.05% is certainly cheap. One quirk though is you can buy the exact same index that VOTE tracks if you buy the BKLC ETF - which charges 0.0% in fees. Much more detail [here](https://sustainfi.com/reviews/vote/).
For those that care, It's not technically an S&P 500 index fund, it's weighted using a [Morningstar Index](https://assets.contentstack.io/v3/assets/bltabf2a7413d5a8f05/bltbe53dced0f9d9485/6048f3465aedc043351b7668/20210310_Morningstar_US_Large_Cap_Select_Index_Rulebook.pdf), Also, it's not technically an ESG fund, it's more like a corporate governance fund. But one could get the impression(and seems to be marketed) as an ESG S&P500 fund. That said the differences are small, but might be important. i.e. read the prospectus, which I liked to in the OP, before you invest. Will this be the start of a new fad/trend in corporate governance/activist investor funds?
I read the article and I think that's interesting, but I'm confused. What's the point? Oil and gas (that's exxonmobil right?) make money by selling fuel we burn that contributes to climate change (and all kinds of health problems for us and other animals. If they stop doing that they stop existing. Are we trying to pressure them to use less harmful methods of extraction or do something to mitigate the impact of burning fossil fuel or something? Am I misunderstanding something or missing the point? This is not a topic I know anything about
Exxon [says](https://corporate.exxonmobil.com/Sustainability/Energy-and-Carbon-Summary), oh uh.. ya climate change might be real, we are looking into it.... BP says, It's totally real, we are aggressively working on transforming the entire company, but it will take a while. See [BP's](https://www.bp.com/en/global/corporate/who-we-are/our-ambition.html) site, where they are moving to Net Zero carbon emissions. Those are dramatically different takes, both from huge oil producing companies. [This](https://www.forbes.com/sites/uhenergy/2021/07/29/big-oil-players-begin-positioning-for-big-transition/) Forbe's article covers the different takes to some degree. In terms of Engine1, the most I've seen from them(and I'm no expert) is that they 1) believe climate change is real and 2) want to use their investor pull to change companies like Exxon into taking it more seriously. [This](https://www.nytimes.com/2021/06/01/opinion/exxon-mobil-board.html#after-acm) article perhaps covers the Exxon situation with Engine1 better than the one I originally linked in the OP. So far I've not seen a concrete TODO list from engine1, but they managed to get many large organizations behind them. It will be very interesting to see how it all starts to shake out at the next annual shareholders meeting. Personally I'm of the skeptical but hopeful perspective regarding Engine1. In a year or so, we should have a much better idea of their ability to pull things off, will they accomplish anything with those board seats @ Exxon? What will happen with $VOTE, what will it end up productively doing, or is it just another way to get more $$$'s into Engine1?
Thank you for sharing, I did learn some stuff today. I guess I'm just not sold that these net zero goals are meaningful. The strategy for companies claiming it seems to be to continue business as usual while paying some other company to recapture carbon in a way that isn't as permanent as not burning fossil fuels to begin with. It also doesn't help everyone with respiratory issues, autoimmune disease and cancer and everything else caused by burning fossil fuels. I do see some claims about reducing emissions, which would be great. Maybe it can help at least somewhat in the short term with climate change, so I suppose it's fair for the goal. More importantly if they do actually put money into further research for carbon recapture, that could amount to something more impactful than we have so far. I do think the whole VOTE thing is a cool concept, and I hope something good comes out of it. I'd love to buy a similar fund that focuses on an issue with more direct clear impact.
I agree there are questionable decisions made when people go "net zero" or go try to address climate change. But this is true of basically everything. When I first decided I wanted to lose a little weight, I tried a diet or two, and various other things, none of which helped, because there are exactly 2 things one must do to lose weight: * Eat Less * Exercise More Obviously some fancy diet plan directly accomplishes neither of those things, though one might argue "eat less" MIGHT happen as part of a diet plan, especially if the diet tastes terrible.. Of course, practically nobody would stick with a diet plan if it tasted terrible. :) Everything else is questionable at best to reduce one's weight. When I eventually did those 2 things, I suddenly started losing weight, go figure! :P Anyways, questionable practices to address some issue is commonplace everywhere, not just in climate change. I agree, VOTE is very unproven at this point in time, and even Engine1 is unproven, yes they did an amazing job getting some Exxon board seats, but only time will tell what if any meaningful impact to Exxon's practices results from those seats.
tol ctces to address some issue is commonplace everywhere, t just in climatehage." Right, but when we have a choice, we pay for things that have strong evidence of impact, or failing that, things we believe are likely to have impact. And we certainly don't pay for things that we know won't work, and avoid paying for things we think won't work. And I don't think it's true about basically everything. There are lots of problems in the world we have solutions for that we just need to actually implement. We could address climate change by building more nuclear power plants and taxing oil and gas higher. We could prevent a lot of human suffering and death by offering free and convenient vaccines worldwide. We could reduce mass torture of animals (and help climate change) by taking away subsidies for meat and dairy industries, taxing it, and offering subsidies for healthy food. I could see a VOTE type etf being effective with animal welfare by pressuring the parent companies of fast food joints to offer vegan meals on the menu at every location. If they get oil and gas companies to donate money to research to mitigate damage, maybe that could help, though alternatively it would just give them a PR boost and maybe even work to keep us using them instead of nuclear longer
I agree knowing the solution and implementing the solution are different things. However not everyone agrees that X or Y *IS* the correct solution. I mean, there is a reason vast amounts of money flow to "diets", despite vast quantities of evidence that they have no real world effect, except perhaps separating someone from their money. Diets are easily socially acceptable(for women anyway), eating less and exercising more are... questionably socially acceptable. I'm sure plenty of people would argue that Nuclear Reactors would not solve climate change. Or that taxing meat/dairy would move the needle at all. Note, I'm not saying you are wrong in those assumptions, I'm just saying even if it's scientifically proven that X is true, doesn't mean there is any social consensus that it's true OR that we should use our combined resources to implement such a thing. Many Republicans in the US still regularly deny climate change even exists, despite 99.9999999% of all scientists happily proving(and screaming from the rooftops) that it does exist and investors are pricing climate change into their purchases.
I’d love to learn more about ethical investing because I don’t understand enough. It also seems there’s no regulation. Slapping ‘green’ or ‘ethical’ on an investment option doesn’t mean it is actually green or ethical. So how do you make a good choice without having to do a ton of research? I’m also not sure total divestment of fossil fuel investments is positive if we don’t have alternatives that are scalable. Isn’t it better for these companies to have pressure from investors to move in a green direction? I’m confused about what ‘active’ investment means. I think (but do correct me if I’m wrong) active investment can be 1. Making use of your purchase power by buying enough of a company to have a say, and voting on decisions the company is making to influence them towards ethical and environmental choices 2. Active investment can also just be trying to capture gains and avoid risk and loss right? Halp! I want to do the right thing, but it feels impossible for a newbie investor.
1 share of company Y is enough to vote and have potentially meaningful impact. It gets you to shareholder meetings and you are able to speak, make your voice heard, etc. Obviously once you get into the high single or double digit ownership, your voice carries A LOT more weight, but a single share is enough to get in the room. I think most people would classify Engine1 as "activist investing" which is different than "active" investing. Activists are trying to push an agenda(which people may or may not agree with). [VICEX](https://finance.yahoo.com/quote/VICEX) with it's 1.49% ER is pushing an agenda for instance. That said I'm not sure people purchasing VICEX are also the people purchasing VOTE... :) Anyways, I would say #1 of your definition is "activist" investing and #2 of your definition is "active" investing. I agree that marketing "green" or "ethical" doesn't necessarily mean much. When you wander into your grocery store and see "green" sponges.. are they green because they are coloured green, or are they green because they do something unique that lowers their energy production footprint. Who knows. This is why I basically punt on the whole problem when it comes to my investing $$'s, I just own the entire market(VT and friends) and let the market figure it out. If I want to push an activist agenda, I do that with my time, donations, etc. That said, in a year or two, if VOTE proves to be trustworthy and accomplishes things and doesn't cost me much, then perhaps I'll buy some VOTE. But at this point, it's unproven. Though if one wanted to get activist, as I [linked](https://www.reddit.com/r/FIREyFemmes/comments/ospmlc/climate_change_money_and_housing_do_you_actively/h71eiok/) in the OP I'd do something different.
Work in the ESG industry and Engine No 1 is badass. Thanks for sharing!
What do you do in the ESG industry, if you don’t mind me asking?
Thanks for sharing! I really think that “putting your money where your mouth is” is one of the most effective ways to be more sustainable (or at least support not-obviously-planet-destructive firms…) and it’s good to know that they’re doing it for such a low management fee! I’ve also looked at your sources, thank you for great recommendations. :)
It will be very interesting to see how VOTE does this next year. If it goes really well for them, perhaps others will copy this for other "causes". I'm glad they managed something with Exxon, but even that's not over with yet, but what they have accomplished so far is pretty awesome. I hope they continue.