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Boston to move short-term funds to investments in companies that work to improve the environment and society

Mayor Walsh announced today that the city will begin to put its cash on hand in environmentally and socially conscious investments - and in local financial institutions.

The operating funds, which the city uses to pay bills, could total about $150 million a year in short-term fixed income securities of companies that have strong environmental and societal records, and about $100 million to be deposited in local banks.

Walsh said city money managers will work with Ceres, a Boston-based non-profit that helps promote companies working on such issues as "climate change, water scarcity and pollution, and human rights abuses," and to move other companies towards working on those issues.

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Comments

Does this transfer money from a place of higher interest to a place of lower interest? If lower, how much lower? That's the only way I can judge whether this is a good idea. I can't get a warm fuzzy supporting local institutions if the cost is tens of thousands in lost income.

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"Walsh said city money managers will work with Ceres, a Boston-based non-profit that helps promote companies working on such issues"

Does Ceres do this work for free? Or will the City be paying them for the privilege of earning lower monetary returns on their investments?

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Someone's paying Ceres one way or the other. But whoever's managing Boston's money today isn't working for free either.

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Yeah, you really want to start putting money away for dealing with climate change issues that are just going to get much worse in the coming years, right?

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If it's winter this must be a slush fund.

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If these socio-enviro-unicorn companies are on sound financial footing, as in not just burning through VC funding and green grants while inflating earnings reports and promises (cough cough Tesla), then it's a sound move. If the financial health of the company depends on Solyndra-style grants and tax rebates, or on government policies that create artificial demand bubbles like the FHA/Fannie/Freddie baloney from the previous decade, then it's a bad move.

The point is: a slush fund is bad governance, but a slush fund that's at the whims of forces outside of your control is just stupidity. After all, if you can't tell who the mark is....

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CALPERS disastrous investment in mortgage backed securities and green companies that went belly up should have been a warning for municipalities.

Does the City Council have a fiduciary duty to the residents of Boston?

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Solyndra 2.0, take our money!

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