The Papal Encyclical & Interfaith Power and Light Collaboration

Align your Investments with your Faith Values

At Krull & Company, many of our clients are people of faith – they make aligning their investments with their values a priority. That’s why it is so important that we recognize the potential impact of the Pope’s Climate Change Encyclical, Laudato Si, for what it is: a call to action for people of all faiths to recognize our human impact on the planet and to begin taking steps today to make environmental and social responsibility a priority.

In alignment with that priority, we are proud to be collaborating with both the Georgia and North Carolina Interfaith Power & Light (IPL) organizations to offer socially and environmentally responsible investing solutions, including fossil-fuel-free options.

We held a strategic planning call recently with Kate McGregor-Mosley, Executive Director of Georgia IPL and Susannah Tuttle, Executive Director of NC IPL to lay out how best to work together. We are pleased that both executive directors understand the importance of moving beyond their traditional scopes of energy efficiency consulting and retrofitting for congregations. We all believe that the way your endowment and personal monies are invested matters – and that by making a change to a more responsible portfolio, you are choosing to be better stewards of our small and fragile planet, while maintaining competitive investment returns at the same time.

The Pope’s Encyclical specifically addresses the importance of taking action, “A change in lifestyle could bring healthy pressure to bear on those who wield political, economic and social power. This is what consumer movements accomplish by boycotting certain products. They prove successful in changing the way businesses operate, forcing them to consider their environmental footprint and their patterns of production. When social pressure affects their earnings, businesses clearly have to find ways to produce differently. This shows us the great need for a sense of social responsibility on the part of consumers…Purchasing is always a moral – and not simply economic – act” (Chapter 6, Part 206)

Krull & Company’s solutions help put these principles to work

These solutions work well for divesting congregational endowment monies from fossil fuels and reinvesting into more sustainable companies. Typically, this entails reallocating about 8 percent of the endowment (the current S&P 500 energy allocation) into Krull & Company’s Green Sage Sustainability Portfolio. Green Sage is our Signature fossil-fuel-free equity portfolio focused positively on companies with sustainability as a product, service or core tenet of the business.

Members of congregations can also participate and have an impact as well, through our diversified socially and environmentally responsible portfolios. As an investment management and financial planning firm, we have helped many individuals align their investments with their values, including brokerage, trust and retirement monies.

And, as a 1 Percent for the Planet member, Krull & Company is a financial supporter of both Georgia and North Carolina Interfaith Power and Light organizations.

Krull & Company, LLC is a Certified B Corporation in Asheville, NC. We are a leading socially and environmentally responsible investment management and financial planning firm. Contact us for more information or to schedule a complimentary consultation.

Fossil Fuel Divestment Gaining Momentum

Recently, the Norwegian Government Pension Fund Global, the world’s largest sovereign wealth fund, announced that it would be selling shares of Duke Energy and other coal-burning utilities from it’s portfolio. Why is this important? Because the pension fund is one of Duke’s largest shareholders, holding around 0.76 percent of the company’s outstanding shares.

It is also important because it is one of the first major government investments to decide to divest from fossil fuel companies. Many colleges, institutions and non-profits have been selling their shares recently. 350.org has been a major driver of the divestment movement internationally, including organizing Global Divestment Day on February 13, 2015.

The rationale behind fossil-fuel divestment is multi-fold:

       Investments in fossil-fuels does not align with many people/institution’s values

       To shape public policy/discussion and to limit influence by well-funded energy companies

       Potentially reduce financial risk from liabilities or stranded assets

       To reallocate investments to more sustainable companies

Krull & Company, Asheville’s only socially and environmentally responsible investment management firm has been offering fossil-fuel-free portfolios to clients since 2012. Our Green Sage Sustainability Portfolio has been used as a reinvestment option for individuals and institutions that are divesting from fossil fuels. In addition, we also offer two diversified mutual fund portfolios with no fossil-fuels! Contact us to learn more.

Washington Advocacy Trip: Part 3

Sometimes you have to meet where you have to meet. Representative Beyer of Virginia is one of the new kids on the block. Because of that, his office space is limited. So, when we met with his staff on Wednesday, our meeting room doubled as a storage locker.

Wednesday morning started off with a visit to the White House Conference Center complex, including going thru a secret service checkpoint. The White House had extra security because the Japanese Prime Minister was in town. We met with folks from the Council on Environmental Quality whose focus is on climate, public health and resilience. I found it interesting that the word resilience was used often by members of the administration, both from CEQ and Agriculture.

The EPA’s Clean Power Plan also was big on their agenda. Basically, they’re looking to reduce carbon dioxide emissions to 30% below 2005 levels over the next fifteen years. States are given the choice of how they do it – solar, wind, geothermal, energy efficiency, etc – or a combination. We believe that the plan will be a big job generator as states take action to implement the plan.

A little later in the day, we met with Undersecretary of Agriculture, Robert Bonnie. He reiterated to us that the President is personally very engaged on climate change and energy solutions. He said that the Forest Services sometimes spends as much as 50% of it’s budget on fire fighting – a direct result of a warming climate. From the agriculture perspective, Undersecretary Bonnie is focused on:

  • Resilience
  • Rural development banks
  • Market-based approaches to climate problems
  • Working in social impact investing on agriculture and natural resources
  • Energy efficiency loan program
  • Quantifying greenhouse gas emissions from agricultural practices across the country
  • Providing solutions for emissions offsets.
A plaque on Representative Morgan Griffith's wall

A plaque on Representative Morgan Griffith’s wall

We rounded out our advocacy trip by heading back to the Hill and visiting with five House of Representatives offices. We met with staff from both sides of the aisle again, and were greeted with interest and good questions.

General Seip was our expert on military research and use of renewable energy. I enjoyed working with him, because he’s been at the front lines of our energy supply. When he was overseeing the air war in Iraq, his charges had to protect the convoys supplying oil to the ground troops. He said lots of soldiers were lost delivering and protecting the oil. He strongly advocated for continued research into advanced biofuels and other renewable energy technologies by the military as a matter of national security and to avoid putting more soldiers in harms way.

We wrapped up our visit with a tour of the Capitol and the viewing galleries of both the House and Senate.

Overall, it was outstanding trip. I learned much about advocating for causes, engaging with lawmakers and the overall governmental process in Washington. Given the opportunity, I would gladly head back.

Washington Advocacy Trip: Part 2

You learn a lot about the political process by walking the halls of Congress. Not much goes on in the chambers, but much goes on in the offices and halls of the Senate & House office buildings.

We started off our Tuesday morning meeting with Peter Rogoff, Undersecretary of Transportation. Transportation has been a hot topic, as the transportation trust fund has been severely underfunded for years. Much of this has to do with the fact that the gas tax has not been raised since 1993. Over that time, CAFE standards have risen while average miles driven has dropped. The result is the situation we have right now.

Our group had concerns about overall funding, but also that proposed transportation bills lack progressive solutions to transportation, such as public transit, ride-sharing and technology. One such piece of technology we used as an example was Ridescout. The app provides multiple options for getting from point A to point B, including walking (and how many calories you would burn), using Uber and Lyft, public transportation and cars. The tech term is “Mobility-as-a-Service.” My colleague, Mark Bauhaus from Silicon Valley was a strong proponent these technology solutions.

We heard several options for funding as we headed over to the Senate offices for more meetings. We met with both sides of the aisle, and they all had a similar message – we don’t know where the money is going to come from. Some advocate raising the gas tax and attaching an automatic inflation increase while some want to use re-patriated funds from corporations to cover costs. We heard from Ethan Garber that truckers are actually in favor of raising the gas tax. Some want to change the word tax to “user fee.” We were concerned that using the re-patriated funds is only a short-term solution.

Just about everybody agreed that nothing was going to happen during this Congress and that another stop-gap funding solution is in the works. The unfortunate aspect is that they have used a technique called smoothing federal pensions to pay for the gap in funding. Basically, they have raided workers pensions – that’s not right!

I have to say that I was very impressed with the ten Senate offices that we met with, both Republican and Democrat. Most meetings were with staffers, but Senator Boozman, a Republican from Arkansas, agreed to meet with us. Like the staffers we met, the Senator listened, asked good questions and was genuinely interested in what we had to say.

Our team meeting with Arkansas Senator Boozman

Our team meeting with Arkansas Senator Boozman

We talked a lot about the economic side of things. Being green is green! For example, we discussed the number of jobs that clean energy has brought to the US. In fact, California now has more clean energy jobs than Hollywood jobs!

As businesspeople, we advocated for policies and legislation that enables clean energy business owners to write long-term business plans. Tax incentives for renewable energy (solar, wind & efficiencies) are an on-again/off-again proposition, while subsidies for fossil fuels are permanent. We simply would like to see a level playing field for all types of energy, not just the deep-pockets of oil, gas and coal. So, with equivalent incentives, clean energy business owners can lay out long-term business and employment plans.

And our last topic of the day, we also discussed the option of CEITs (Clean Energy Investment Trusts) as a way to fund clean energy projects. REITs (Real Estate Investment Trusts) are a proven way to fund housing/office/retail development and provide cash flow to investors. An equivalent investment vehicle would foster additional clean energy development plus it would give a market signal that government was behind it.

Part 3 will cover our Wednesday meetings and other issues we discussed with the administration and legislators.

Washington Advocacy Trip: Part 1

I arrived in Washington DC last week to join 20 other business leaders as part of E2 (Environmental Entrepreneurs) advocacy week. This was a very dynamic and accomplished group and I was honored to be a part it.

They broke us up into teams and again, I was amazed at the quality of individuals they had assembled. My team included:

  • Marc Boom, the E2 Director of Advocacy
  • Mark Bauhaus, a technology veteran from silicon valley, and partner at JustBusiness
  • Ethan Garber, CEO of IdleAir
  • Norm Seip, USAF Lieutenant General (Ret), national security consultant
Our team in the Russell Senate Office Building

Our team in the Russell Senate Office Building

We had multiple objectives for our meetings:

  • Demonstrate to legislators and the administration the importance of marrying economic and environmental interests.
  • Establish relationships with legislators on both sides of the aisle.
  • Discuss our policy agenda which include
    • The importance of incentives and renewable energy tax credits
    • Clean energy financing opportunities
    • Climate Change legislation and rules
    • The EPA Clean Power Plan
    • A Transportation Bill that is sustainable both financially and environmentally
    • Continued support for the military’s research into renewable energy

A couple of very busy days awaited of us after our briefing on Monday night. Part 2 will go over our first day of advocacy…

Preparing to Meet Lawmakers

Melissa and I arrived safe and sound in DC this morning. I’m very much looking forward to heading to Capital Hill tomorrow morning with my colleagues from E2 (Environmental Entrepreneurs).

We are divided up into several groups. My group will include two other green entrepreneurs and a retired General. Our first day will include meetings with nine Senators (or their staff.) Our second day we’ll be meeting with five House Members plus a couple folks from the Administration.

As I was spending the last couple of hours researching the different Senators and Representatives, I find it so amazing the wide variety of “opinions” on economic, environmental and energy issues. Even within parties!

Our goal is to educate on the importance of legislation designed to foster green economic growth, reduce emissions and make our transportation system as efficient and safe as possible. I look forward to the opportunity!

Mr. Krull Goes to Washington

I am looking forward to heading to Washington, DC on April 27th as part of a coalition of environmental-based entrepreneurs meeting with lawmakers and administration officials. The trip is being organized by E2, Environmental Entrepreneurs, a non-partisan community of business leaders who promote sound environmental policy that builds economic prosperity.

Krull & Company has been a member of E2 since early 2014 and has taken an active role in encouraging lawmakers to adopt environmentally responsible policies and laws.

On this trip, we will be focusing on three issues:

  • Supporting clean energy policies and programs in upcoming energy bills and tax reform
  • Supporting and defending the implementation of policies to reduce greenhouse gases in an economically beneficial way (Clean Power Plan)
  • Supporting a new transportation bill that prioritizes innovation, lowers environmental impacts and increases economic efficiency.

What does this mean for you?

All of these issues affect our clients in some way – from renewable energy tax credits to more efficient forms of transportation. They also are relevant to our strategies of investing in sustainable companies and divesting from fossil fuels.

I will keep you up to date on the results.

Pete Krull

Duke Energy Misses an Opportunity to Do the Right Thing

60 Minutes aired an investigative segment on Duke Energy and their Dan River coal ash spill. Leslie Stahl did a very good job of asking tough questions, but gave Duke CEO Lynn Good more than enough opportunities to be proactive and change the direction of the company. Good did not embrace the opportunity.

Instead, she blamed industrial practices of the past and called for more studies on how to handle the coal ash problem. In essence, just buying more time for another coal ash disaster to occur. If I were a Duke Energy investor (which I am not), I’d be concerned about this attitude. As CEO, Good has a fiduciary responsibility to reduce the company’s risk, not just increase shareholder value. Her actions (or lack thereof) call into question her handling of shareholder risk. If I’m an insurer, I am having a hard time underwriting the risk posed by these coal ash ponds and probably I’m raising their premiums substantially!

What Good could have done is make a bold statement: Duke Energy is going to be proactive about coal ash and is currently making plans to remove all toxic coal ash from it’s facilities within the next 24 months. In addition, we are announcing an unprecedented investment in renewables and energy efficiency: from solar to wind to geothermal, we intend to put fossil fuels behind us and become a world leader in showing how a company can move forward do the right thing.Instead of creating a company of the future, Good is giving us more of the same: excuses and pollution.

Click here to watch the story

David Crane, CEO of NRG Energy sees things very differently. In a letter to shareholders, Crane sees the need for energy companies to move forward, “There is no Amazon, Apple, Facebook or Google in the American energy industry today. There is no energy company that relates to the American energy consumer by offering a comprehensive or seamless solution to the individual’s energy needs. There is no energy company that connects the consumer with their own energy generating potential. There is no energy company that enables the consumer to make their own energy choices. there is no energy company that empowers the individual wherever they are, whatever they are doing for however long they are doing it.”

This idea of putting the consumer first is important – it is Duke’s consumers who have to deal with the effects of the energy company’s polluting ways. Crane points to future generations who will have to fix the mistakes of this one,“As we forge ahead, I am mindful of the fact that the next generation of Americans – the generation around my soon-to-be adult children – is different from you and I. Somehow, some way, the next generation of Americans became “all in” in their commitment to sustainability, in every sense of the word, including clean energy. With them, it is built into their DNA, not just learned behavior as it is for us.

And make no mistake about our children. They will hold all of us accountable – true believers and climate deniers alike. The day is coming when our children sit us down in our dotage, look us straight in the eye, with an acute sense of betrayal and disappointment in theirs, and whisper to us, “You knew… and you didn’t do anything about it. Why?” And for a long time, our string of excuses has run something like this: “We didn’t have the technology…it would have been ruinously expensive…the government didn’t make us do it…”

And while I do not agree fully with Mr. Crane, especially on the use of nuclear, he is making an effort to take the lead and be a change maker – something we at Krull & Company and our clients can applaud.

This time, CEO Good missed her chance to make positive change.   However, each day provides her a new opportunity to shift Duke Energy away from primitive industrial waste practices.  Let’s hope she seizes the next opportunity to do the right thing.

Click here to read Mr. Crane’s shareholder letter

Thoughts on Low Oil Prices

We’ve seen a precipitous decline in the price of oil over the past several months. Market analysts and economists have been chiming in with their opinions on the effects. Here is ours based on our socially & environmentally responsible strategies…

First and foremost we see low oil prices as a tremendous threat to the environmentally unfriendly practice of fracking and even worse, tar sands. These forms of extraction are already on economic thin ice and low prices may push these companies into financial trouble. Several use low quality (and high interest) debt to fund their operations. An extended period of low oil prices may put them under.

In addition, it makes the Keystone XL pipeline basically moot. If it is economically unfeasible to produce tar sands oil, then the pipeline isn’t needed.

From our environmental perspective, this is all very good. The disaster we see in Alberta tar sands needs to be limited to what they have done so far – no more! Fracking may continue because of the natural gas uses, but again, an extended period of low oil prices will test the market. It may also give scientists more time to gain the evidence needed to limit it’s use.

Because global markets still, for the most part, run on fossil fuels, low oil prices are good for the economy. This may continue to be a driver for growth as transportation and raw material costs should go down. This may drive stock markets to even higher highs. Beware if prices rise, however, causing unexpected higher expenses for businesses.

A negative from our environmentally responsible perspective is that low oil prices may inhibit the growth of alternative fuel vehicles and energy production. Low gas prices makes the premium paid for electric and hybrid vehicles less palatable. Nevertheless, there is continued momentum in these markets, and we don’t see much of a slow-down.

We are especially happy to see that the price of alternative energy generation is basically at par with dirty fossil fuel generation as reported in the New York Times, http://www.nytimes.com/2014/11/24/business/energy-environment/solar-and-wind-energy-start-to-win-on-price-vs-conventional-fuels.html

Overall, we are happy to see low oil prices, despite the potential negative effects on clean energy development. We view the low prices as the effect of global inter-industry competition (OPEC vs North America) resulting in the potential for an industry implosion. Only time will tell.

Neill Yelverton Becomes Partner

We are pleased to announce that Neill Yelverton, a financial advisor at the firm, has become an equity partner.

“Neill has been with us for over a year and has proven to be a tremendous asset. His dedication to social and environmental issues, his drive and work ethic, and his desire to provide first-class client service fits very well with the mission of Krull & Company. I am excited to have him as a business partner,” Krull & Company President and Founder Peter Krull said. 

Yelverton hold a B.S. in Wildlife Science from North Carolina State University and a M.B.A from Western Carolina University where he completed independent study in Corporate Social Responsibility and Sustainability in Business. He is currently working on completing his Certified Financial Planner (CFP®) designation.

“What a great opportunity to be a partner in this amazing firm,” Neill Said. “Every day I get to help clients be changemakers with their investments – it’s something that I’m proud of and truly believe in.” 

Neill is currently accepting select new individuals, trusts, non-profits and business retirement plans as clients.