Scientific Beta

Wealth Professional Canada: "Touted as vehicles for investors to do good while doing well, climate-focused investment funds are actually sabotaging the war against global warming by regularly engaging in greenwashing, according to academic research."

Wealth Professional Canada 21/09/2021

"(...) The study, titled Doing Good or Feeling Good? Detecting Greenwashing in Climate Investing, was produced by Edhec, a French business school and think tank. Analyzing Europe-listed ETFs from managers including Amundi, BNP Paribas, BlackRock, and HSBC with underlying indices from MSCI, FTSE Russell, and S&P Dow Jones, Edhec found 35% of constituent companies with worsening environmental performance are given increased weighting within the funds. The figure rises to 41% of stocks with deteriorating carbon intensity, which is measured by emissions per unit of output. An unfortunate upshot, the paper said, is that the ETFs effectively suck up capital that could and should have gone to sectors that are playing a central role in the transition to a cleaner economy. (...)"