Going Fossil Free Is More Complex Than Most Investors Think
- Date: 07-Jul-2021
- Source: Factset
- Sector:Financial Markets
- Country:Gulf
Going Fossil Free Is More Complex Than Most Investors Think
Let’s start with a little quiz. Say you are building a concentrated portfolio of car manufacturer Toyota, trading house Mitsubishi, beverage firm Coca-Cola Amatil, and financial firm Berkshire Hathaway. Which of those four firms owns oil, coal, or gas reserves?
Around 2010, the divestment movement in U.S. university endowments helped put climate change on investors’ agendas. The call to no longer invest in climate-harming oil, coal, and gas found tremendous support worldwide and by 2020, around 2,000 institutions and 60,000 individuals, representing $14 trillion assets worldwide, have begun or committed to divest from fossil fuels.
On the surface, going fossil free seems to be straightforward; exclude all energy and extractive companies from your portfolio and you are done.
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