The Accidental Investor


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A new social media platform – The Vital Few - allows people to take back control of their future and make sure their pension funds are investing in ways that help tackle climate change.

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The Accidental Investor

  1. 1. TheClimateInstitute The Accidental Investor 1
  2. 2. The Accidental InvestorTaking back control of your futureSeptember 2012 “In what has been described as the democratisation of global capital, the largest pool of available investment capital is the around $60 trillion supposedly managed for the long term by the world’s retirement, insurance and sovereign wealth funds...Shifting even a small percentage of these funds can make a significant impact in tackling climate change and - as proper long term risk management - requires no legislative change.” John Connor, CEO of The Climate InstituteA new social media platform – The Vital Few - allows people to take back control of theirfuture and make sure their pension funds are investing in ways that help tackle climatechange. 2
  3. 3. BackgroundThe Vital Few is an engaging new social media platform, managed by the Asset OwnersDisclosure Project, that empowers millions of retirement fund members to help redirecttheir savings from high-carbon, high-risk investments to ones that can help secure asustainable and prosperous low carbon future and ensure safe member returns.The Asset Owners Disclosure Project (AODP) is an independent global not-for-profitorganisation whose objective is to protect members retirement savings from the risksposed by climate change.The AODP was originally developed in 2008 as an initiative of The Climate Institute andwhile it is now a separate entity, the two maintain a close working relationship.For more information on AODP visit… 3
  4. 4. The IssueMaybe you reduce, reuse and recycle. Maybe you’re into using renewables, buyinglocal, and drinking fair-trade. Whatever the case, one thing’s for sure, you’re aware ofhow you’re spending your take-home income, you’re spending it the way you want to.But are you aware of how your pension contribution is being spent on your behalf?Did you know…Over 55% of your mandatory pension contribution is invested in high-risk, high-carbonassets with less than 2% being invested in low-carbon assets.You may be accidentally investing your money in things that are out of line with yourown values, like dangerous high-carbon industries. Not only does this jeopardise theenvironment but it also places your own personal finances under significant threat.By becoming one of The Vital Few you can take backcontrol of your future and start to invest with intent. 4
  5. 5. The CauseNearly $60 trillion is tied up inpension funds globally. That’s thesingle largest consolidation ofmoney found anywhere in theworld.So when it comes to solving the greatest challenge of our generation - reducing our reliance on fossilfuels to safeguard our environmental and economic future - the pension pot of wealth must be calledinto action.Remember it’s your money. Pension fund managers are simply custodians actingon your behalf.Climate change is the most high-risk, high-certainty event that will ever impact global investment.Pension funds worldwide are largely exposed and ill-prepared for the predicted rapid re-pricing ofcarbon which will guarantee things are no longer worth what they once were. The casualties of theirshort-sightedness will be your financial nest egg for the future. 5
  6. 6. What A Few Can Do“Never doubt that a small group of Send a letter through The Vital Fewthoughtful, committed citizens can change network and your concerns will bethe world. Indeed, it’s the only thing that directed straight to the top of theever has.” investment chain. Margaret Mead, American cultural anthropologist Pension funds are legally bound to answer even just 1 letter from a member. If 1 then 10 then 100 then 1,000 of us send just 1 letter each, it will pile on the pressure and effectively force disclosure of pension funds’ damaging investment practices.By asking them to hedge climate risk by increasing low-carbon investment from less than2% to 5%, this will redirect billions of investment dollars and create a tipping pointushering in the low-carbon economy. 6
  7. 7. Taking ActionYou can get involved as part of The Vital Few in a number of ways:1. Visit www.areyouthevitalfew.org2. Choose one of the short interactive experiences in the action bar at the top of your screen. Make the selections that represent you to personalise a letter and reflect your values, vision and concerns.3. Join The Vital Few in a few quick steps and become part of a collective of inspiring, like-minded individuals who are courageously rewriting the future.4. With one click, load your slingshot and send your letter straight to the top and ask the decision makers in your pension fund to disclose how much of your money they are currently investing in high-risk, high-carbon assets and what they are doing to hedge climate risk on your behalf.5. Share The Vital Few story with your friends and family. Blog and tweet about the problem or post your unique Vital Few member badge on your Facebook page.6. Visit The Vital Few Community and have some fun telling us what you want for your future. 7
  8. 8. Taking ActionTell your pension or superannuation fund whats important to you. Craft your personalisedletter and send it straight to the top. 8
  9. 9. What Happens NextOne of the greatest benefits of being part of The Vital Few is that you get direct access tothe decision makers in your pension fund. However, they may respond in a number ofways from superficial and elusive to legitimate and committed.Here’s what to expect. Your fund will either be a: Fixated on fossil Adopting the herd Cleverly using green While politely Fully engaged with fuels, this fund is so mentality of wash acknowledging the evolving their investment besotted by the allure resistance, this techniques, such as importance of climate process to incorporate of short-term returns fund is sitting on their commitment to risk and recognizing climate risk this fund they deliberately the fence waiting ESG (Environmental, your serious personal is seeking new and avoid any dialogue for another fund to Social & Governance) concerns this fund innovative ways to gain about the danger of make the first this fund is distracting conveniently fails to high returns, without high-risk, high-carbon move. your attention from take any compromising future investments. the real material responsibility prosperity, both financial issues. for the solution. and environmental. 9
  10. 10. What People Are Saying “With unprecedented extreme“Sitting atop the wealth chain, the pension weather events, historic melting ofindustry has continued its fast and furious the arctic ice cap and radicallyspending spree on high-carbon, high-risk inadequate action from ourinvestments with little accountability for their governments, this new socialimpact on the long-term financial security of media platform opens up a newboth individuals and the broader economy. front for millions of fundThe Vital Few’ platform can be used by members.”anybody signing up as a free member toexercise their legal rights in forcing their Kelly Rigg, Executive Director of thefunds to demonstrate how they are Global Campaign for Climate Actionperforming their fiduciary duty in managingbig systemic risks such as climate change.” Julian Poulter, Executive Director of the Asset Owner Disclosure Project (AODP) & Business Director of The Climate Institute “Through mandatory retirement fund contributions and other savings, millions of workers have become accidental investors and participants in short term and unsustainable investment decisions with global impact. This vital tool is part of a profound change in the operation of global capital…These citizen investors can now collaborate to help make the kind of sustainable economy we need for a more prosperous future." Sharan Burrow, General Secretary of the International Trade Union Coalition  10
  11. 11. What People Are Saying “Asset owners like the pension and super funds appear to have learnt nothing from the mismanagement of sub-prime mortgages which triggered the Global Financial Crisis. The Vital Few is an online community where even a few pension members can lead real change. The pension industry is failing its members, and "The bedrock principle behind it may only take a vital few to steer it back capitalism is that it works when owners on course.” look after their property…The Vital Few“This is clearly a milestone in initiative, by starting with the issue of Dr John Hewson, AODP Chair & former leader ofonline movements. Never before has climate risk, is a milestone in helping the Liberal Party of Australiathe online movement been able to restore genuine ownership toalign the financial interests capitalism.“of so many people with the interests Stephen Davis, Senior Fellow at the Harvardof global sustainability and Law School Program on Corporateprosperity.” Governance/Brookings Institution & Co-author of The New Capitalists: How James Slezak, Partner, Purpose.Com Citizen Investors are reshaping the Corporate (founders of GetUp and Avaaz) partner Agenda  11
  12. 12. Be Part Of The Vital Few  12