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NRDC Partnership Produces First-Ever Stock Index Excluding Fossil Fuel Companies

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NRDC Partnership Produces First-Ever Stock Index Excluding Fossil Fuel Companies

Americans are worried about pollution—oil trains running through their towns, fracking in their neighborhoods, coal dust in their air. They’re worried about what the future will look like for their children if carbon pollution continues unchecked.

Wall Street is worried about it too. Under pressure from a growing movement of people who want their money out of fossil fuels, universities, pension investors and foundations are looking to exclude coal, oil and gas stocks from their portfolios. Until now, it could be hard to figure out if investments were free of fossil fuels: Large portfolios like retirement funds invest in multiple companies at once and might put money in oil, gas, or coal. As a result, well-meaning investors might find themselves holding so-called “passive” investments in the very companies they wanted to avoid.

The NRDC has partnered with BlackRock and FTSE Group to launch the first stock market index to exclude fossil fuel companies. Photo credit: Sarah Craig/NRDC

For decades, NRDC has created and supported policies that will ultimately end our reliance on fossil fuels. Today, we are proud to announce that we are working to accelerate that change by helping to create an innovative investment solution that will aid investors who want to keep their money out of fossil fuel companies.

Over the last year, NRDC has partnered with BlackRock and FTSE Group, the global index provider, to launch the first stock market index to exclude fossil fuel companies—a new tool that will help ensure that climate-conscious investors can match their financial interests with their values.

A stock market index helps investors track the performance of a group of stocks. NRDC worked with FTSE to develop comprehensive and transparent methodologies that screen out companies linked to owning, exploring, or extracting fossil fuels. Now, investment companies like BlackRock will use the FTSE index to create low-cost portfolios for customers who don't want to invest their money in fossil fuel companies.

It’s a critical need. Foundations, universities, pension groups, and other major organizations that have wanted to get out of fossil fuel investments have a responsible path to do so—one that will allow them to continue to make money for their clients, but not at the expense of our air, water and climate.

Over the past six months, 80 percent of new electricity installed in the U.S. came from renewable energy. We are beginning to replace fossil fuels that endanger our health and climate.

Now, we need others to join us in the fight for a clean energy future. Demonstrating market demand for this index and related investment solutions will help support the growing movement to shift investments away from dirty fuels.

You can help: Tell your university, your company’s pension advisors, your place of worship: It is time to invest in a clean energy future. It is time to invest in our children’s future and do the work we must do to leave them the world they deserve.

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A plume of smoke from wildfires burning in the Angeles National Forest is seen from downtown Los Angeles on Aug. 29, 2009 in Los Angeles, California. Kevork Djansezian / Getty Images

California is bracing for rare January wildfires this week amid damaging Santa Ana winds coupled with unusually hot and dry winter weather.

High winds, gusting up to 80- to 90 miles per hour in some parts of the state, are expected to last through Wednesday evening. Nearly the entire state has been in a drought for months, according to the U.S. Drought Monitor, which, alongside summerlike temperatures, has left vegetation dry and flammable.

Utilities Southern California Edison and PG&E, which serves the central and northern portions of the state, warned it may preemptively shut off power to hundreds of thousands of customers to reduce the risk of electrical fires sparked by trees and branches falling on live power lines. The rare January fire conditions come on the heels of the worst wildfire season ever recorded in California, as climate change exacerbates the factors causing fires to be more frequent and severe.

California is also experiencing the most severe surge of COVID-19 cases since the beginning of the pandemic, with hospitals and ICUs over capacity and a stay-at-home order in place. Wildfire smoke can increase the risk of adverse health effects due to COVID, and evacuations forcing people to crowd into shelters could further spread the virus.

As reported by AccuWeather:

In the atmosphere, air flows from high to low pressure. The setup into Wednesday is like having two giant atmospheric fans working as a team with one pulling and the other pushing the air in the same direction.
Normally, mountains to the north and east of Los Angeles would protect the downtown which sits in a basin. However, with the assistance of the offshore storm, there will be areas of gusty winds even in the L.A. Basin. The winds may get strong enough in parts of the basin to break tree limbs and lead to sporadic power outages and sparks that could ignite fires.
"Typically, Santa Ana winds stay out of downtown Los Angeles and the L.A. Basin, but this time, conditions may set up just right to bring 30- to 40-mph wind gusts even in those typically calm condition areas," said AccuWeather Senior Meteorologist Mike Doll.

For a deeper dive:

AP, LA Times, San Francisco Chronicle, Washington Post, Weather Channel, AccuWeather, New York Times, Slideshow: New York Times; Climate Signals Background: Wildfires, 2020 Western wildfire season

For more climate change and clean energy news, you can follow Climate Nexus on Twitter and Facebook, sign up for daily Hot News, and visit their news site, Nexus Media News.

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