MONTPELIER — The City Council has voted to support socially responsible investments to avoid companies profiting from the sale of fossil fuels, firearms and alcohol.

In a unanimous decision at a meeting last week, the council voted to amend its investment policies for its nearly $700,000 portfolio of investments.

The council had previously instructed the Investment Committee to look at amending the city’s investment strategies by adding environmental, social and governance components to section 10 of the investment policy.

Investment Committee member Terence Field presented a report to the council on the administration of the investment policy that looked an ensuring the safety, liquidity and yield of principal investments and portfolio diversification. The report also looked at risk rating of investments, broker/dealer restrictions, accounting and reporting of investment activity, as well as ethics and conflicts of interest.

Under section 10, covering environmental, social and governance components of city investments, the report stated: “The portfolio shall avoid investing in individual securities of companies that derive the majority of their revenues from the following sources/activities: Production/manufacture and sale of alcohol and/or tobacco products; production/manufacture and sale of firearms; and the exploration, extraction, refining of fossil fuels as well as products and services that support these processes.”

The report went on to note that “exclusion of these market sectors may impact the performance of the investment portfolio when compared to industry performance benchmarks,” adding that it may be necessary to purchase shares of mutual funds and/or exchange-traded funds that are invested in the industries and sectors the city is trying to avoid.

“For a while now, we’ve been adding environmental, social governance restrictions to the policy,” Field said. “It’s been kind of wide open. We worked with the investment adviser that the committee works with to manage the portfolios of the city and came up with some language (for the policy).

“I would call this kind of a first step and we may go back and look at this over time,” Field added.

“I’m thrilled about this and I think it’s great that we’re taking these steps and it’s taken us some time to get to this point,” said Mayor Anne Watson.

In a later news release, Watson added, “This vote represents a lot of work behind the scenes by our Investment Committee and investment managers. Our principles and values drive other council decisions and our investments should be no different.

“We have had a net-zero goal for many years, so it makes sense for our investments to reflect and embody that goal. Not investing in alcohol, tobacco and firearms is very common practice in the world of socially-responsible investing. I’m proud of Montpelier, a relatively small city, for figuring out a way to make these changes,” Watson said.

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