Don’t Drive Dirty Businesses Into the Financial Shadows
The more institutional investors disinvest from polluting companies, the greater the risk that climate damage will continue unabated.
Asset management firms are increasingly tempted to meet their environmental obligations by withdrawing capital from companies and industries that do the most damage to the planet. But there’s a risk that the assets they offload will drift into the shadows of private ownership, where polluting practices will receive less scrutiny and therefore stand even less chance of being curbed.
Some 1,500 institutional investors with assets of more than $39 trillion have committed to disinvesting from the fossil-fuel industry, DivestInvest said in a report last month. That’s up from fewer than 200 institutions overseeing $52 billion when the lobby group first started totting up such commitments seven years ago.