Scientific Beta

The New Republic: "But a new paper from the German business school and think tank Edhec found that exchange-traded funds claiming to rate investments strictly on the basis of climate weren’t just ineffective, they may have made the problem worse by directing more money to greenwashing than to actually effective sustainability directives. One of the paper’s most notable findings was that these funds are still fundamentally more concerned with returns than with emissions."

The New Republic 05/10/2021

"(...) But a new paper from the German business school and think tank Edhec found that exchange-traded funds claiming to rate investments strictly on the basis of climate weren’t just ineffective, they may have made the problem worse by directing more money to greenwashing than to actually effective sustainability directives. One of the paper’s most notable findings was that these funds are still fundamentally more concerned with returns than with emissions. As a press release put it: “Even though investors and managers communicate extensively on the use of climate data to construct their portfolios, this data represents at most 12% 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.” (...)"