(C) Common Dreams
This story was originally published by Common Dreams and is unaltered.
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Divesting from fossil fuels could add billions to pension funds [1]
['Steve Randall']
Date: 2023-12
The researchers looked at the public equity portfolios of the six funds that represent around 3.4 million people to discover how exiting energy investments would impact returns.
Not only would they have increased ROI, but the funds would have also cut their carbon footprints by the equivalent of the emissions for powering 35 million homes per year, further increasing their ESG credentials.
"Influential investors, like these large public pension funds, can bring about positive change on a few fronts," said Dr. Olaf Weber, professor in the School of Environment, Enterprise and Development at Waterloo. "Energy divestments can create higher returns for the funds, which leads to higher returns for the beneficiaries and reduced exposure to climate risks. Consequently, it leads to safer pensions."
The study looked at how events such as the Covid-19 pandemic and war in Ukraine would have impacted returns, given the latter has fuelled energy price hikes.
While fossil fuel investments have gained, making divestment less attractive financially, the researchers found that even in times of high performance in the fossil fuel sector, divestment does not reduce financial returns in any significant way.
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[1] Url:
https://www.wealthprofessional.ca/news/industry-news/divesting-from-fossil-fuels-could-add-billions-to-pension-funds/377217
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