A valid critique, but also worth mentioning, as discussed in the article, much of the GHG emissions for the top 10% (which includes households down to ~$200k) comes from passive income.
Friendly reminder to check who you bank with and what’s in your 401k if you find yourself in that group.
Having not read the article, I would wager a guess that because 401k balances are invested in diverse funds, and if the fund composition includes corporations contributing to emissions… and you are making money off their profitability… you are therefore contributing to those emissions. Pick other things to invest in.
I’ll make sure to only invest in hippy communes that are self sustaining and use indigenous clothing and tool making techniques.
Every company on the stock market contributes to GHG emissions. Every company is using electricity produced by fossil fuels, or produces or uses plastic products, or has vehicles that consume fossil fuels.
One of the high-growth sectors in most american’s 401k’s is “Energy”. This is a euphemism for fossil fuel companies, such as Shell, BP, and the various supporting industries. Another high-growth sector is “home construction,” which is literally an industry that exist to pave over paradises and put in parking lots creating sprawling suburbs in it’s wake that are owned by companies like Blackrock.
To be fair, you can’t really get away from that, especially since you don’t really have the ability to manage your 401k that way. But passive growing investments absolutely feed Capitalism and directly contribute to the massive polluters.
https://youtu.be/NJ7W6HFHPYs - This video from Climate Town explains how the bank or credit union only keeps a fraction of your money in reserve when you deposit your money in a savings account, certificate of deposit, or other bank account. The bank/CU is investing the majority of your money, and ecological harm is not a consideration when they are choosing investments. When you deposit money with a financial institution it is almost certain that some portion of your money is being invested in ecologically harmful organizations.
Similarly, your 401k funds are likely in index funds or mutual funds that hold significant shares in ecologically and socially harmful companies like ExxonMobil, Nestle, Chevron, Coca-Cola, et. al.
Environmental, Social, and Governance (ESG) investment funds exist that ideally exclude ecologically & socially harmful industries, but every ESG fund I have ever encountered is not nearly exclusive enough and has significantly higher fees.
For example - the Vanguard ESG International Stock ETF VSGX excludes adult entertainment, recreational drugs, gambling, weapons, nuclear power, and fossil fuels, yet Nestle is the second largest holding in the fund, and many of the other stocks in the fund likely contribute to environmental and social harm indirectly.
Consider investing in small-businesses and organizations in your local community instead. It is truly bizarre and unique to our time that investing on Wall Street is more accessible than investing on Main Street.
Probably has to do with the investments themselves. You may not be personally ‘picking’ the investments, however, most target funds include investments that have such investments. Source: wife works at a financial institution. Also I’m drinking so Google it ontop of it or something.
Edit* Also totally shouldn’t count.
If you invest in companies that emit GHGs, then you are helping finance their pollution, and profiting from that.
If you keep your money at a bank that does business with major polluters, your funds are being used by the bank to back loans to those polluters to help them pollute.
Spare change invested in GHGs contributes to climate change.
