Sustainable investing doesn’t only mean companies that are already green—large investors can push polluters to become greener
Many pension funds are pledging to invest in green assets with net-zero emissions, but these investments tend to yield lower returns than the broader market index. Beyond that, a hard shift toward green investments could remove the incentive for heavy emitters to clear up their act. Investors need to rethink the assumption that sustainable investing means investing primarily in green assets, writes Professor Sebastien Betermier in Benefits Canada. Sustainable investments that will accelerate the green transition could include companies that have committed to lowering their emissions and are equipped to engage with investors but have not yet met their targets. By investing in and engaging with these companies, institutional investors can push them to become greener.
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