Green Century Funds President Leslie Samuelrich reports that the recent, costly ruling against BP provides a concrete example of why it makes sense to avoid investing in oil companies. Green Century sent out a release that provides the rationale from an investor's point of view.
A news release said the details of the spill in 2010 may have faded, which was once described as the "worst U.S environmental disaster" by then EPA Director Carol Browner; but the recent watershed ruling, which may eclipse $50 billion, brought the financial impact of the company's actions back to the attention of investors worldwide.
After the ruling, BP's stock immediately declined, and financial analysts predicted that the fine could wipe out years of profit and interfere with the company's financial ability to maneuver effectively. BP was found guilty of gross negligence by U.S. District Judge Carl Barbier for its oil rig that exploded, killing 11 people and dumping 170 million gallons of crude oil into the Gulf of Mexico for three months.
"The ruling shows that the risks of pursuing high-cost and high-risk oil explorations in deep water can impact investors for years," stated Leslie. "This ruling is a wake-up call for investors who have not yet addressed the potential risks of investing in fossil fuel companies. While the BP explosion was unprecedented, no drilling company can predict or protect against all the unforeseen environmental accidents and resulting costs and liabilities that can impact investors."
Both Green Century's Balanced Fund and Equity Fund exclude fossil fuel companies and instead seek to invest in companies that manage environmental risks and operate sustainably. Green Century also works with companies to improve their environmental footprint and make their supply chain more sustainable.