The Climate Impact SRI portfolio is focused on being climate-conscious rather than focusing on all ESG dimensions equally, designed to give investors exposure to climate-conscious investments without sacrificing proper diversification and balanced cost.
By investing in the Climate Impact portfolio, investors are actively divesting assets away from holders of fossil fuel reserves while cutting their investments’ carbon emissions. Carbon emissions per dollar of revenue in the 100% stock Climate Impact portfolio are half of those in the 100% stock Betterment Core portfolio, based on weighted average carbon intensity data from MSCI. Because the social engagement fund, VOTE, has yet to be evaluated by MSCI, we used the carbon intensity of SPY for this calculation as it has a very similar investment nature to VOTE.
Additionally, the Climate Impact portfolio replaces our International Developed Bond and US High Quality Bond exposure by investing in a global green bond ETF. Green bonds, as defined per MSCI, fund projects that support alternative energy, energy efficiency, pollution prevention and control, sustainable water, green building, and climate adaptation. To learn more about the portfolio construction of the Climate Impact portfolio, review our full SRI portfolio methodology.