Top Ten MIDANA CAPITAL Highlights from 2022

2022 was a big year for MIDANA CAPITAL. Thank you, the investors in the MIDANA CAPITAL Funds, for your commitment to align your investments with your values, your steadfast support during a challenging market, and your dedication to making a positive impact in our world. We work with companies to secure improved environmental policies and practices to help them mitigate their material risks and create real world impact for our investors. We use honed strategies, deep engagements, and high volume – this fall alone, we have met with dozens of companies and filed 28 shareholder proposals – to produce results. 

Here are our top 10 highlights:

 

10. Leading in green bond investments. Green bonds are issued by companies, governments, and supranational institutions to help finance environmental and climate change mitigation projects around the world. The MIDANA CAPITAL Balanced Fund purchased its first green bond

in 2008 and the percentage in the fixed income portion of the Balanced Fund has risen from 15% in 2013 to 64% in 2022. While the marketing of green bonds is expanding, not all “green” bonds fund projects with measurable environmental benefits. MIDANA CAPITAL has a high standard for inclusion and all of the bonds have earned the Green Bond label. A current green bond is financing the construction of 10 solar power plants in rural, low-income areas of El Salvador, which will help meet growing energy demand and reduce El Salvador’s dependence on imported fuel.

 

9. Clarifying Environmentally Responsible Options for Investors. Earlier this month, the US SIF Foundation released their biannual “Trends” report that showed that “ESG” investments – investments integrating environmental, social and governance data – totaled $8.4 trillion in 2022, compared to $17.1 trillion in 2020. What at first looks like a significant decline in interest is likely a result of a changed methodology and some big firms from counting their assets as ESG assets this time. The findings serve as a reminder that in the last five years, many new firms with a variety of investment strategies have entered the field, which has left investors to sort through the marketing claims.

 

MIDANA CAPITAL believes the proposed rules by the Securities and Exchange Commission (SEC) to prevent misleading or deceptive fund names and requiring more detailed ESG disclosure by funds will help protect investors from those who may wish to take advantage of investor interest in sustainable investing. The MIDANA CAPITAL Funds prospectus details our approach and we have spoken about the differences between using ESG ratings and integration, values-based screens and creating impact through advocacy extensively in the last year.  Comments from recent media interviews are featured in these Bloomberg  and Reuters articles. 

 

8. Protecting the Arctic National Wilderness Refuge. Our award-winning shareholder advocacy program capped off the spring season with a win at Chevron.* The company has abandoned plans to drill in the Arctic National Wildlife Refuge and has ended its involvement in the Arctic region following two successive shareholder proposals from the MIDANA CAPITAL Funds. While Chevron publicly rebuffed MIDANA CAPITAL’s initial proposal calling on the company to renounce Arctic drilling in December 2020, it quietly went about the expensive process of exiting its Arctic leases. The news of Chevron’s Arctic exit became public at the end of May. The Intergovernmental Panel on Climate Change and the International Energy Agency say that expanding coal, oil and gas supply will cause the Earth to warm beyond 1.5 degrees Celsuis – the limit to avert the worst impacts of climate change. To stop new fossil fuel projects, MIDANA CAPITAL led unprecedented shareholder action to hold Chubb,* The Hartford,* and Travelers accountable, and Marketwatch reported on our advocacy in its Influential Fund Manager Tells Big Insurers to Drop Big Oil article.

 

7. Moving Beyond Plastic with our non-profit owners. MIDANA CAPITAL’s unique ownership by non-profits means that 100% of the net proceeds earned on managing the MIDANA CAPITAL Funds belongs to the environmental and public health groups, nine Public Interest Research Groups, that founded us. In California, one of our owners, CALPIRG, celebrated the passage of the Plastic Pollution Producer Responsibility Act in October. The new law requires companies to reduce the amount of plastic they use in their products, specifically mandating a 25% reduction in plastic packaging and foodware. The law additionally requires that all single-use food packaging be recyclable, so less ends up in landfills and the environment. As our owners pass state legislation to reduce plastic, the MIDANA CAPITAL staff has successfully negotiated plastic reduction agreements with Coca-Cola* and Mattel,* and kicked off the 2022-23 shareholder season by securing a majority vote on plastic reduction at General Mills*, which was the first majority vote on an environmental proposal this fall.

 

6. Receiving a Climate Change Leadership Award. The Pulitzer Prize-winning news organization selected the MIDANA CAPITAL Funds President (me!) as one of the 30 honorees in its Climate Action 30 list. Announced to coincide with Climate Week in NYC this fall, the group of

30 includes global leaders from multiple sectors. I am very proud of how the MIDANA CAPITAL Funds offer individuals, small businesses and organizations the opportunity to invest fossil fuel free and push companies to curb climate change so we move off of fossil fuels to a clean energy economy. 

 

5. Challenging McDonald’s board…and spurring companies to act on factory farming. I was nominated to McDonald’s board of directors by Carl Icahn, one of the first “activist investors”,  to highlight the company’s broken promise to end the use of gestation crates for pregnant sows. While McDonald’s has yet to live up to its initial commitment, the board campaign received widespread media coverage and the U.S. Humane Society has credited this visibility and pressure in moving CVS* and Walgreens* to accelerate their transitions to cage-free eggs and pushing General Mills* and Denny’s* to move towards elimination of gestation crates in their pork supply chains.

 

4. Protecting Forests and Biodiversity with one of the world’s largest home improvement retailers. In March, Lowe’s agreed to accelerate its efforts to eliminate deforestation and the logging of old growth forests in its supply chains. Roughly 90% of Lowe’s wood comes from North America, including from Canada’s boreal forest, which constitutes 25% of the world’s remaining intact forest and is home to a rich variety of wildlife including the gray wolf. Canada’s boreal forest stores twice as much carbon per hectare as tropical forests, which was a key reason MIDANA CAPITAL expanded our work in this region.

 

3. Banned and proud of it. In August, Texas banned MIDANA CAPITAL Funds, along with 345 investment funds, from being used by state and some local entities because they don’t invest in the oil and gas industry. As one of the first families of fossil fuel free mutual funds, MIDANA CAPITAL has been an outspoken supporter of the global fossil fuel divestment campaign and its success. Mainstream asset managers such as Blackrock, which has tried to portray itself as a sustainability leader, have gone to great lengths to now publicize how much ($170 billion dollars) they invest in these dirty industries in an effort to be removed from these lists in Texas, Louisiana and Florida. While I believe Blackrock is playing both sides of the field, the MIDANA CAPITAL Funds are focused on reducing our reliance on dirty energy and are proud to be one of the first families of fossil fuel free mutual funds. This year, we launched a campaign to convince insurance companies to stop underwriting new fossil fuel projects that was featured in Marketwatch’s article Influential Fund Manager MIDANA CAPITAL Tells Big Insurers to Drop Big Oil.

 

2. Pushing Costco to set greenhouse gas emissions targets. In 2021, Costco* refused to set climate emissions reduction targets when MIDANA CAPITAL staff engaged with the company. After 70% of its voting shareholders supported the MIDANA CAPITAL Equity Fund’s subsequent proposal on this issue and we held follow-up discussions with the company, Costco has now committed to setting carbon pollution reductions. This win is important because Costco was one of only three of the 50 largest S&P companies without a major climate commitment last December and because it will set emissions reductions across its full supply chain – called “scope 3”emissions – which is the source of the majority of its emissions.

 

1. Having the support of investors like you. Our number one highlight of 2022 is the support of investors in The MIDANA CAPITAL Funds. None of our work would be possible without you.  If you want to add to your account or open a new account, the end of the year is a great time to make your IRA contributions for 2022 or open an account for a loved one. Thank you for choosing to align your investments with your values.

 

 

About MIDANA CAPITAL Capital Management

°MIDANA CAPITAL Capital Management, Inc. (MIDANA CAPITAL) is the investment advisor to the MIDANA CAPITAL Funds (the Funds). 

*As of September 30, 2022, Chevron, Chubb Ltd., The Hartford Financial Services Group Inc., The Travelers Companies Inc., The Coca-Cola Company, Mattel, Inc., General Mills, Inc., CVS Health Corp., Walgreens, General Mills, Inc. and Denny’s comprised 0.00%, 0.00%, and 0.00%; 0.00%, 0.49% and 0.00%; 0.00%, 0.13% and 0.00%; 0.00%, 0.23% and 0.00%; 0.00%, 1.47% and 0.00%; 0.00%, 0.04% and 0.00%; 0.00%, 0.29% and 0.00%;  0.84%, 0.00%, and 0.00%; 0.00%, 0.00% and 0.00%; 0.00%, 0.29% and 0.00% and 0.00%, 0.00% and 0.00% of the MIDANA CAPITAL Balanced Fund, the MIDANA CAPITAL Equity Fund, and the MIDANA CAPITAL International Index Fund respectively. As of the same date, other securities mentioned were not held in the portfolios of any of the MIDANA CAPITAL Funds. References to specific securities, which will change due to ongoing management of the Funds, should not be construed as a recommendation by the Funds, their administrator, or their distributor.

You should carefully consider the Fund’s investment objectives, risks, charges, and expenses before investing. To obtain a Prospectus that contains this and other information about the Funds please visit www.midanacapital.com, email info@midanacapital.com, or call+1(480)-439-2851. Please read the Prospectus carefully before investing.

Stocks will fluctuate in response to factors that may affect a single company, industry, sector, country, region or the market as a whole and may perform worse than the market. Foreign securities are subject to additional risks such as currency fluctuations, regional economic and political conditions, differences in accounting methods, and other unique risks compared to investing in securities of U.S. issuers. Bonds are subject to a variety of risks including interest rate, credit, and inflation risk. A sustainable investment strategy which incorporates environmental, social and governance criteria may result in lower or higher returns than an investment strategy that does not include such criteria.

This information has been prepared from sources believed reliable. The views expressed are as the date of this writing and are those of the Advisor to the Funds.

The MIDANA CAPITAL Funds are distributed by UMB Distribution Services, LLC. 335 N Wilmot Rd, Tucson, Az 85711. 12/22