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Green Investing: Opportunities to effect change through active shareholder engagement CFA Society of Seattle May 24, 2010 Erin Gray, Strategic Analysis.

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Presentation on theme: "Green Investing: Opportunities to effect change through active shareholder engagement CFA Society of Seattle May 24, 2010 Erin Gray, Strategic Analysis."— Presentation transcript:

1 Green Investing: Opportunities to effect change through active shareholder engagement CFA Society of Seattle May 24, 2010 Erin Gray, Strategic Analysis Green Century Funds

2 Shareholder Advocacy or Engagement Shareholder advocacy basics Why investors engage with companies Strategy overview and current trends Engagement examples

3 Advocacy Definition and Issues Definition : – Using power of stock ownership to promote change in corporate practices Issues (ESG): – E nvironment Toxics chemicals, BPA, pesticide use, water – S ocial Diversity, labor safety, animals rights, community relations – Corporate G overnance Say on Pay/Exec. Comp., political accountability, sustainability reporting, housing foreclosures

4 Rationale for Engagement Make a change vs. divestment Increasing fiduciary pressure – Freshfields report “…integrating ESG considerations… is arguably required” “…a responsible investment option should be the default position.” – UN PRI (Principles for Responsible Investment) – INCR (Investor Network on Climate Risk)

5 Green Century Mission alignment Risk mitigation Competitive advantages of green investing Risk assessment: – Litigation – Regulatory – Physical – Reputational

6 Advocacy Tools Direct negotiations Shareholder resolutions Voting proxies

7 Shareholder Advocacy Trends Social Investment Forum 2010 Trends Report: – > $3 trillion in assets use at least 1 of 3 responsible investment strategies

8 Shareholder Advocacy Trends cont’d. Social and Environmental Shareholder Proposals Filed in 2011 Other – 2% Banking – 2% Animals – 4% Health – 5% Labor/ Human Rights – 13% Diversity – 13% Environment – 26% Sustainability Reporting – 10% Political Spending – 23% Source: As You Sow’s 2011 Proxy Preview

9 Shareholder Advocacy Trends cont’d Shareholder Resolutions by Filer 24% 8% 19% 15% 13% 8% 13% Source: As You Sow’s 2011 Proxy Preview

10 Thank You! Contact Information: Erin Gray, Strategic Analysis Green Century Funds

11 Hydraulic Fracturing Source: ProPublica

12 GC Balanced Fund Performance 3 Month1 Yr3 Yr Since Incept. GC Balanced Fund4.99%10.42%3.66%6.58% Lipper Balanced Fund Index3.90%11.96%3.78%7.37% The Balanced Fund uses the Lipper Balanced Fund Index as a benchmark. The Lipper Balanced Fund Index tracks funds whose primary objective is to conserve principal by maintaining, at all times, a balanced portfolio of both stocks and bonds. Typically, the stock/bond ratio ranges around 60%/40%. The performance data quoted represents past performance, and past performance is not a guarantee of future results. Investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information quoted. To obtain performance information current to the most recent month-end, please call GREEN. Performance is calculated after fees and includes the reinvestment of Income dividends and capital gain distributions, if any. The performance shown does not reflect the deduction of taxes that a shareholder might pay on any Fund distributions or the redemption of Fund shares. As of 3/31/11:

13 GC Equity Fund Performance 6 Month1 Yr3 Yr Since Incept. GC Equity Fund13.53%9.52%2.22%7.29% S&P 500® Index17.31%15.65%2.35%8.57% The performance data quoted represents past performance, and past performance is not a guarantee of future results. Investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information quoted. To obtain performance information current to the most recent month-end, please call GREEN. Performance is calculated after fees and includes the reinvestment of Income dividends and capital gain distributions, if any. The performance shown does not reflect the deduction of taxes that a shareholder might pay on any Fund distributions or the redemption of Fund shares. As of 3/31/11: The S&P 500® Index is an unmanaged index of 500 selected common stocks, most of which are listed on the New York Stock Exchange. The S&P 500® Index is heavily weighted toward stocks with large market capitalization and represents approximately two-thirds of the total market value of all domestic stocks. It is not possible to invest directly in the S&P 500® Index.

14 MSCI KLD 400 Social Index Performance


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