Scientific Beta

Benefits and Pensions Monitor: "Traditional climate investing strategies do not live up to the promises of their promoters, says a study produced as part of the EDHEC-Scientific Beta Advanced ESG (environmental, social, and climate) climate investing research chair study. ‘Doing Good or Feeling Good? Detecting Greenwashing in Climate Investing’ says even though investors and managers communicate extensively on the use of climate data to construct their portfolios, this data represents at most 12 per cent of the determinants of portfolio stock weights on average."

Benefits and Pensions Monitor 23/09/2021

"(...) Traditional climate investing strategies do not live up to the promises of their promoters, says a study produced as part of the EDHEC-Scientific Beta Advanced ESG (environmental, social, and climate) climate investing research chair study. ‘Doing Good or Feeling Good? Detecting Greenwashing in Climate Investing’ says even though investors and managers communicate extensively on the use of climate data to construct their portfolios, this data represents at most 12 per cent of the determinants of portfolio stock weights on average. This low percentage very clearly means that the construction of climate indices remains essentially guided by purely financial considerations. To tackle the inconsistency between the stated climate objective and the reality of their investments, the study suggests that when climate considerations represent less than 50 per cent of the determinants of the weight of the stocks in a portfolio, then this portfolio should be considered to be at significant risk of greenwashing and should not be permitted to claim that it is climate-friendly or aligned with net-zero ambitions. (...)"