Fossil-Free Investments Out-Perform Conventional Portfolios
Fossil-free stock investments have been out-performing conventional, fossil-filled portfolios since 2010, according to a new analysis by MSCI Inc., the world’s largest provider of stock market indices.
The analysis “found that portfolios with a mix of coal-, gas-, and oil-producing companies returned 11.8% a year,” Corporate Knights reports. “Fossil-free portfolios had an average return of 13%.”
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MSCI’s own benchmark ACWI Index, which covers a wide range of companies across 23 developed and 23 emerging economies, “returned 62.2% since 2010,” CK adds. “When MSCI eliminates companies that own large fossil-fuel reserves, the index has returned 69.9%.”
“This reality may explain why the number of investment professionals in the United States offering fossil-fuel free portfolios to investors has nearly doubled,” CK comments.
“It might also explain why G20 powers are reportedly investigating the risks that fossil fuel companies are taking by investing in new projects that are incompatible with the move to a low-carbon economy and heightened climate action.”