Scientific Beta

OMFIF: "Researchers at Edhec, a French business school, have found that passive exchange-traded funds tracking low carbon, climate change or Paris-aligned indices allocate little of their money to the greenest companies and habitually increase the weighting of companies with a deteriorating environmental performance. They also found that these ETFs were starving sectors that needed to make the biggest investment in decarbonisation."

OMFIF 12/10/2021

"(...) In fact, there is evidence that the difficulty of securing the transition to a low-carbon economy may perversely be increased by ESG funds. Researchers at Edhec, a French business school, have found that passive exchange-traded funds tracking low carbon, climate change or Paris-aligned indices allocate little of their money to the greenest companies and habitually increase the weighting of companies with a deteriorating environmental performance. They also found that these ETFs were starving sectors that needed to make the biggest investment in decarbonisation. (...)"

Copyright OMFIF