Calvert  News & Commentary

Calvert Investments and Fossil Fuels

Calvert has several portfolios with little or no exposure to the energy sector


Calvert takes seriously the opportunity we have as a leading sustainable and responsible investor to use our investment decisions and shareholder advocacy to play our part in making a difference on climate change. Our rigorous investment criteria related to climate change produces low–carbon portfolios with limited exposure to high–impact sectors such as energy. When we do hold companies in the energy sector, Calvert leverages integrated research and industry–leading advocacy to give our shareholders an influential voice in the executive suites and boardrooms where company climate policies are set.

Low or No–Carbon Portfolios

All companies evaluated for inclusion in Calvert Signature portfolios are reviewed on seven key sustainability criteria. In addition, companies in the energy sector are subject to scrutiny regarding their policies, programs and performance related to climate and several other material sustainability issues. As a result, Calvert currently has several portfolios with little or no exposure to the energy sector. In fact, the Calvert Social Index® has more than four times less exposure to the energy sector than the Russell 1000. Calvert’s energy exposure also compares very favorably to the products offered by other sustainable and responsible investment (SRI) firms. Three of Calvert’s mutual funds1 hold none of the “Top 200 Fossil Fuel Companies,” as identified by the Carbon Tracker Institute,2 while two funds have no exposure to the energy sector at all.

Calvert’s No– and Low–Carbon Portfolios

Portfolio Name Total Exposure to Carbon Tracker Top 200 Total Exposure to Fossil Fuel Reserves by Portfolio Holding Weight
Calvert Global Water Fund 0% 0%
Calvert Global Alternative Energy Fund 0% 0%
Calvert International Opportunities Fund 0% 0%
Calvert Equity Portfolio 0% <1.0%
Calvert VP SRI Equity 0% <1.0%
Calvert Small Cap Fund 0% ~3.0%
Calvert Social Index Fund <1.25% <1.75%
Calvert Capital Accumulation Fund <2.25% <2.25%
Calvert VP Mid Cap Growth <2.25% <2.25%
Calvert International Equity Fund <2.5% <2.75%
Calvert Balanced Portfolio <3.0% <3.0%

Based on a review of holdings done as of May 31, 2013.

Calvert shares the frustration with the slow and uneven progress in addressing the global climate change expressed by the growing fossil fuels divestment movement. Committed supporters of divestment have rightly focused on the severity of climate change and the urgency of addressing it. Divestment is a valid choice, but so too is active ownership that challenges companies to curb carbon emissions and to point us toward a renewable energy economy. What Calvert finds unacceptable is not exercising our rights as shareholders to push companies to look over the horizon and see the compelling need for dramatic action to address this growing crisis.

We believe Calvert and other active owners can help bring about the transition to a low–carbon and, with time, to a renewable energy economy. Therefore we recognize the opportunity natural gas presents as a bridge fuel in the next ten to 15 years, provided any hydraulic fracturing involved in its development is done in line with the highest environmental and social standards. We recognize there will be a point when a further transition must be made from natural gas to an economy run primarily on renewable energy. In fact, we offer products like the Calvert Global Alternative Energy Fund, which seeks to invest in companies that are pushing the boundaries of innovation to hasten that day.

When companies with fossil fuel reserves are included in Calvert’s portfolios, our advocacy includes pushing them to report and reduce greenhouse gas (GHG) emissions, to expand investments in alternative energy, and to support constructive climate change public policy. The Calvert Sustainability Research Department applies decades of advocacy experience to improve companies’ policies and performance.

Calvert has been filing shareholder resolutions and engaging in other advocacy on climate–related issues with companies in our Signature portfolios since 2002. Examples from this year’s efforts include the following.

Climate–Related Governance Proposals

Denbury Resources

In 2013, Calvert filed and withdrew a shareholder resolution that called on Denbury to change its board charter language to make reference to its oversight obligations related to environmental, social and governance issues, including climate change. The company also agreed to review Global Reporting Initiative (GRI) guidelines and to index its next sustainability report according to this standard.

Energen Corporation

In 2013, Calvert filed and withdrew a shareholder proposal with Energen Corporation that requested that the company establish formal and publicly disclosed board oversight of environmental, social and governance issues, including climate change. The company established outlined those obligations is the Energen’s governance document “Role of Board of Directors Section of Energen’s Corporate Governance Guidelines.”

Range Resources

In 2013, Calvert filed and withdrew a shareholder proposal with Range Resources that requested that the company establish formal and publicly disclosed board oversight of environmental, social and governance issues, including climate change. The company has committed to make this disclosures clarifying broad sustainability governance oversight.

Whiting Petroleum

In 2013, Calvert filed and withdrew a shareholder proposal with Whiting Petroleum that requested that the company establish formal and publicly disclosed board oversight of environmental, social and governance issues, including climate change. Whiting adopted amendments to the charter of the company’s Nominating and Governance Committee of the Board of Directors that formally establish that the committee has oversight responsibility for sustainability issues and indicate that this committee will review environmental and social issues at least once a year.

Climate–Related Reporting and Hydraulic Fracturing Proposals

Cameron International

In 2013, Calvert filed and withdrew a shareholder proposal with Cameron International asking the company to report regularly on its sustainability performance including its climate change policies, programs and performance. Following engagement with Calvert, Cameron committed to publish a GRI–indexed sustainability report by September 2013. Calvert reviewed a draft of the report in April and the company published it in May.

EOG Resources

In 2013, following advocacy and a withdrawn resolution by Calvert and others, EOG Resources has committed to disclosure all its hydraulically fractured wells through the FracFocus database, well integrity testing data, oil spills greater than five barrels, reportable injury rates, and GHG emissions.

Pioneer Natural Resources

In 2013, Calvert filed a shareholder proposal that called on Pioneer Natural Resources to improve its policies, programs and performance disclosure regarding its operations that employ hydraulic fracturing. On May 23, Calvert the proposal and it received the support of almost 42 percent of the company’s shareholders, very significant support for a first–time proposal of this kind. Following the vote, Calvert continued its very productive meetings with the company. Pioneer has committed to review a list of disclosures requested by Calvert and to commit to indicate which can be made this year and which will be disclosed at a later time.

Climate–Related Public Policy Advocacy

In addition to engaging directly with companies in our Signature Portfolios, Calvert has contributed to public policy and defended regulatory measures requiring industry action to reduce GHG emissions and invest in alternative energy. For example, we have worked with the National Resources Defense Council (NRDC) to preserve Section 526 of the Energy Independence and Security Act, which prohibits the U.S. Department of Defense from buying oil with high carbon content.

Calvert also has worked with the Investor Network on Climate Risk (INCR) to support strong fuel economy standards for automobiles (which the Obama Administration established in August 2012), has vigorously supported the U.S. Environmental Protection Agency (EPA) proposed standard to limit greenhouse gas emissions from electric power plants, and has advocated for renewable energy.

Climate Advocacy through SAGE

In addition to our Signature Portfolios, Calvert offers products that give us the opportunity to use our advocacy expertise to advance environmental, social, and governance performance in companies that may not currently meet certain standards, but have the potential to improve.

The Calvert SAGE Strategies (SAGE stands for Sustainability Achieved through Greater Engagement) are geared toward the investor who wants to take an active approach in encouraging companies to make measurable progress on vital ESG issues. Our SAGE approach has yielded the following climate–related advocacy achievements.


At an October 2008 ExxonMobil executive retreat, Calvert pushed the company to clarify publically its position regarding pending climate change legislation in 2009. In January 2009, CEO Rex Tillerson outlined ExxonMobil's most constructive position on climate regulation to date, which included support for a carbon tax.

At an October 2011 sustainable and responsible investing conference, Calvert prompted Vice President of Corporate Affairs Ken Cohen to reiterate the company's support for a carbon tax and willingness to work with responsible investors and environmental groups to achieve this end. In September 2012, Calvert organized a meeting between sustainability analysts and ExxonMobil senior executives to clarify statements Tillerson made in June of that year that appeared to prioritize adapting to climate change over taking steps to lessen its impact (including greenhouse gas emissions reductions and alternative energy investments). Cohen emphasized the steps ExxonMobil has taken to mitigate the impacts of climate change.

Marathon Oil

Calvert urged Marathon Oil to set and meet GHG emissions reduction targets since 2009, as part of our SAGE Enhanced Engagement with the company. In 2010, the company set a target to reduce its GHG emissions intensity by four percent from a 2008 baseline to 2013. As of 2012, Marathon Oil has made intensity reductions many times higher than the original goal.

Newmont Mining

Following three years of Calvert advocacy on the topic, Newmont included a revised climate change policy in its 2011 sustainability report that states its public policy position is consistent with that of the International Council of Mining and Metals (ICMM). The ICMM policy supports “a global agreement for greenhouse gas emissions abatement that includes emissions reduction commitments from all major emitting nations recognizing common but differentiated responsibilities” and “cooperation in the development, deployment and funding of low emissions technologies in all energy sources.”

Leadership on Oil, Gas and Mining Payment Transparency

The environmental, social and governance impacts of the oil, gas and mining sector extend beyond the challenges of climate change. Most significantly, the natural resource necessary meet the world’s growing needs have become more difficult to access and have receded further into corners of world where governance challenges and corruption are pervasive. In response, Calvert has become the leading investor advocate for transparency in the payments between oil, gas and mining companies and the governments where they operate.

Calvert led a group of investors representing more than $1 trillion dollars in assets under management in support of Section 1504 of the Dodd–Frank Act, which makes disclosure of these payments mandatory for any oil, gas or mining company registered with the SEC. The resulting data will enhance stability in the countries where our resources are developed and will also provide material information to investors about companies’ exposure to political and regulatory risks. Calvert has joined forces with a coalition of non–governmental organizations (NGOs) called Publish What You Pay to stand up to the American Petroleum Institute’s effort to revoke Section 1504 in court and our support has been reference by SEC lawyers during the proceedings. Calvert is also a strong supporter of efforts to create a global extractive industries payment disclosure standard by enacting similar regulations in other markets, such as those implemented recently in the European Union.

Calvert Investment Management, Inc., 4550 Montgomery Avenue, Bethesda, MD 20814.

1. The Calvert Global Alternative Energy Fund, Calvert Global Water Fund, and Calvert Small Cap Fund. As of March 4, 2013.
2. Unburnable Carbon. The Carbon Tracker Institute.


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Calvert Investment Management, Inc. serves as the investment advisor and provides sustainability research for the Calvert mutual funds and institutional investment strategies.

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