Turning Green Into Gold Takes a Leap of Faith - Analysis

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The Washington Post 24/11/2021

The Washington Post

"(...) As ever in the world of environmental, social and governance standards, it’s not hard to find opposing evidence to the UBS findings. The EDHEC Business School’s Risk Institute, for example, argued last month that institutional ownership has little effect in curbing greenhouse gas emissions by companies.  

The EDHEC study used carbon-intensity data on more than 7,000 companies between 2007 and 2018, examining the relationship between their carbon footprints and their ownership by fund managers with combined assets of more than $70 trillion who participated in the 2018 United Nations’ Principles for Responsible Investments survey.

Across the sample universe, the researchers found institutional ownership had almost zero influence; each 1% increase in ownership by institutional investors was calculated to reduce the carbon intensity of firms by just 0.1%. Even among what the report called “heavy polluters,” each 1% ownership increase produced a “limited” 0.4% decline in carbon intensity. “These results suggest that climate-driven responsible investors can complement but not substitute national and international climate policies,” the report concluded. (...)" 

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Turning Green Into Gold Takes a Leap of Faith, The Washington Post, 24/11/2021