Unity College specializes in environmental studies and is known as one of the “greenest” schools in the country, so it bothered college officials that the stock portfolio in which the school’s $14.5 million endowment was invested included shares in some of the world’s largest polluters.

Three years ago, the private college in Waldo County joined other institutional and individual investors that have eliminated the biggest contributors to greenhouse gas emissions – particularly Big Oil and coal companies – from their portfolios.

“The college made an ethical decision that we’re going to walk the walk,” said Melik Khoury, Unity’s executive vice president and chief financial officer.

Working with its investment firm, Portland-based Spinnaker Trust, the college developed a new portfolio that largely excluded the 200 businesses identified by climate change activists as the top fossil fuel companies based on their existing reserves. Although no statistics are available on the adoption rate of that particular type of investment by individuals, the list of 200 companies is helping inform decisions by people who want greener portfolios.

University of Maine lecturer Sharon Tisher, who teaches environmental law and policy classes in Orono, said she and her husband learned in 2013 about Unity’s decision to divest fossil fuel stocks, and they decided to do the same.

“I went right over there (to Spinnaker) and I said, ‘Give me what Unity College has,’ ” Tisher said. Now, the couple’s retirement accounts are fossil fuel-free.


Other investors in Maine also are demanding that their investment advisers develop portfolio options that exclude big fossil fuel companies, said Suzanne Uhl-Melanson, founder of Uhl-Melanson Investor Services in Waterville.

About nine months ago, Uhl-Melanson worked with a group of such clients to come up with a portfolio that was sufficiently diverse while avoiding the largest polluters.

“I had a flurry of emails asking what I could do to carve out fossil fuels from their portfolio,” she said.

One of those emails came from Peter Garrett, a retired hydrogeologist who lives in Winslow and is involved in environmental activism. Garrett said his decision to divest all major oil and coal companies was made for both philosophical and business reasons.

Garrett said he is concerned about global climate change and the effects of continued fossil fuel emissions. At the same time, he believes the rise of alternative energy sources ultimately will devalue companies with large oil and coal reserves.

“You either burn the planet up so that it becomes uninhabitable to human beings … or you leave (oil and coal) in the ground and it doesn’t make any sense to attach value to those resources,” Garrett said.

Both Garrett and Unity’s Khoury said their reduced-emissions investment portfolios have performed as well as or better than they would have if big fossil fuel companies had been included.

“Oil stocks really took a huge hit last year,” Uhl-Melanson said, reflecting stock prices that have been in a tailspin since oil prices plunged.

Still, investors need to be careful whenever they reduce the diversity of their portfolio for any reason – ideological or otherwise, said Bert Smoluk, a certified financial analyst and professor of finance at the University of Southern Maine in Portland.

Less diversity means greater exposure to downturns in one or more of the industries represented in the portfolio, Smoluk said.

“From a dollar and cents perspective, you’re limiting yourself,” he said.

target: policies, not punishment

Another thing investors should realize is that keeping their money out of companies with large oil and coal reserves is not going to change the behavior of those companies or negatively affect their bottom line, Smoluk said.

At most, they may be contributing to the overvaluation of clean-energy companies and the undervaluation of fossil fuel producers, he said.

“They could be indirectly creating some really nice opportunities for other (investors),” Smoluk said.

The point of fossil fuel divestment is not to punish the producers, and there is no expectation that it will force them to change their ways, said Brett Fleishman, senior analyst for 350.org, a nonprofit that raises awareness about the top 200 list.

What widespread avoidance of “dirty energy” by investors would do is raise public awareness and foster a political environment more conducive to clean-energy policies, he said.

“The purpose of the divestment campaign is much more focused on policy,” Fleishman said. “Nobody was expecting to bankrupt Big Oil.”

While he didn’t have any data on the adoption rate of the 200 list by investors, Fleishman said the number of investment advisers attending related conferences since the list was first developed in 2012 has at least tripled to more than 1,000. The list was first published by the nonprofit think tank Carbon Tracker Initiative in a 2012 report on the “carbon bubble,” he said, but it is now updated quarterly for paid subscribers by a New York firm called Fossil Free Indexes. A free update of the list is released annually to the public.

managing fossil-fuel-free funds

Sara Lewis, senior vice president and director of client services at Spinnaker Trust, said her firm has been careful to ensure that its fossil-fuel-free funds remain adequately diverse to be safe for investors. For instance, the energy sector remains well-represented, she said.

“You can actually buy energy companies – just different types of energy companies,” Lewis said.

Spinnaker’s fund, which includes no more than 1 percent big fossil companies at any time, has consistently outperformed the S&P 500, she said.

Neither Spinnaker nor Uhl-Melanson charge their clients a premium to handle their fossil-fuel-free portfolios, but investing in this type of niche fund may cost investors a little more in fees imposed by mutual fund managers.

While it is impossible to guarantee the long-term success of any investment strategy, Lewis said, even the world’s largest oil producers recognize that the shift to alternative energy sources is inevitable. Those companies will have to adapt to remain relevant and successful, she said, and at some point they may fall off the list of stocks for environmentally conscious investors to avoid.

“They still want to be your energy supplier, no matter what that energy is,” she said.

J. Craig Anderson can be contacted at 791-6390 or at:

[email protected]

Twitter: jcraiganderson

Editor’s note: This story was changed from its original version to clarify a reference to premiums and fees.