Divestment news

Far from being close to reaching a consensus, the fossil fuel divestment debate divides SRI investors like no other. Responsible investors are just as constrained by benchmark tracking, fiduciary duty, investment mandates and the need to meet long term liabilities, as mainstream investors are. Excluding such an important sector from a portfolio is never going to be an easy call.

Instead, many SRI investors believe that engagement with companies is their most effective way to help mitigate climate change. The divestment vs. engagement approaches so far seem irreconcilable.

In addition, the carbon bubble thesis has failed to convince all SRI investors. This was one of the main talking points during the recent RI Europe Conference 2014 where a number of responsible investors expressed their mixed views on the topic. Some fear that the different scenarios played out by carbon tracker possibly overstate the chance that legislators from around the World will ever commit to imposing limits on the use of fossil fuels. Indeed, successive summits at Kyoto, Copenhagen and Rio have reminded us of the enormous difficulty to overcome prevailing short-termism and national interest.

Contrary to what many might have expected, despite the pressure from divestment campaigners, SRI investments across our oil & gas clients in Europe continue to increase, according to the institutional ownership data that NASDAQ OMX Corporate Solutions analyzed on behalf of listed companies. Currently, one in ten shares held by institutional investors in the sector is currently managed by SRI investors which have integrated companies’ Environmental, Social and Governance performance indicators in their investment allocation process. Furthermore, their presence in the sector has accelerated and has nearly caught up with the all-sector European SRI Ownership Benchmark.


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7 Responses to Divestment news

  1. Leigh Lowe

    There is another term for SRI investors …

  2. Bruce of Newcastle

    They should be consistent.

    Divest oil and gas, since its evil.
    Divest Israeli stocks since they are evil too.
    Divest banks – they are evil.
    Divest mining companies, they all rape Gaia.
    Divest News Corp, run by evil Murdoch666.
    Divest anything owned by China since they are a totalitarian regime contaminated with rapacious capitalism.
    Divest real estate since it is unfair and bourgeoisie to own property.
    Divest food companies since they deal with GMO’s.
    Divest agricultural companies for the same reason.
    Divest Big Pharma because they are big.
    Divest all other ASX stocks since those companies are all capitalist too.
    Divest all unlisted companies which pay more to men than women, which is all of them.
    Kill their unborn children since they save the world their carbon footprints.
    Divest their own lives since they breathe out evil CO2 and otherwise soil Gaia’s pristine world.

  3. Tel

    The best type of divestment is when you can offload the loss onto someone else.

  4. blogstrop

    The basic problem with this concept is that the notion of socially responsible investment draws much upon the delusions of environmentalists. Hence the various “renewable energy” boondoggles which saddle society with irresponsible, wasteful PITS ventures like windmills, solar, poorly thought out geothermal and rust-bucket tidal contraptions.

    Investing in things that are only propped up by taxpayers and don’t make money is more like feel-good philanthropy for the sake of the swampy demographic. Securing reliable and less expensive energy supplies is where the truly socially responsible course lies.

  5. mark

    Dammit…I was hoping to con some poor SRI into divesting their ocean front house at a huge loss. After all, rising oceans are making it worthless:|.

    I kid you not! A guy I volunteered with sold his V8 Monaro because he didn’t want to be stuck with a “Worthless” investment. Hate Holdens but Jesus priest! I really worry for this planet if bureaucrats like him walk the earth.

  6. AP

    It’s interesting that oil and gas always seems to escape the divestment/world bank campaigns against “fossil fuels” (which only seems to include coal).

  7. Boambee John

    Amusing that laws supported by the “socially responsible” impose responsibilities on company directors and financial advisers that restrict “socially responsible” investment!

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