In August 2006 the Sierra Club partnered with Forward Funds to continue to provide a financial product to its environmental focused membership. The Sierra Club established environmental and social guidelines that companies must meet in order for the Forward Fund investment managers to invest in them. Forward Fund operates two mutual funds under the Sierra Club name. The Sierra Club Equity Income (SCFLX) fund is in the moderate allocation category. The index that it is measured against is the Dow Jones Moderate Portfolio. The Sierra Club Stock (SCFSX) fund is a large-capital growth fund that is measured against the S&P 500.

The prospectus for these funds outlines how Forward Fund managers employ the Sierra Club’s environmental guidelines. The four-step process begins with Forward Fund managers identifying stocks that they believe will meet their investment goals. These companies, and their subsidiaries, then must pass through twenty environmental and social guidelines in order to determine whether the stock from the chosen companies meets the Sierra Club’s core values. Companies that meet the criteria must then obtain final approval from a committee of Sierra Club members. Approved companies are included in the universe of securities that Forward Fund managers then can invest in when they feel it is advantageous. The prospectus indicates that the companies are continually reevaluated by the Sierra Club and Forward Management to ensure that they meet the guidelines.

One of the Sierra Club guidelines is Corporate Accountability. They state that they will employ investor activism by divesting in companies that are scandalous and fail to have transparent business practices. I did not find any statements from the Sierra Club or Forward Funds that indicated that they attend the shareholder meetings of the companies in which they invest.