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How passive investment dulls the green wave (FT)

Today, it is obvious to everyone that environmental responsibility is not only big business but also indicative of a massive shift in political and social global mores. Many money-lending entities are now going the route of choosing not to enter into business arrangements with high-carbon based companies. While some of these business-losing decisions are undoubtedly the price of soul-searching, other companies are following suit because glomming onto a tsunami-size backlash against non-renewable resource companies is simp!y in their best interest. Yet, even with principled and self-interest companies going green, there remains a slew of companies still mired in old-school fiscal mores, willing to endorse and monetize companies that continue to base their profits on non-renewables.

Key Takeaways:

  • While some companies may have eschewed investments in non-renewables out of principal, others are latching on to the trend out of pure self-esteem interest.
  • Capital resources for high-carbon industries has not entirely dried up, however, an ongoing issue which Christopher K. Merker, PhD reports on.
  • Merker is a director at Robert W. Baird & Company, who holds a PhD in Investment Governance and Fiduciary Effectiveness from Marquette University.

“Yet even with this tailwind, the impact of their campaign will be limited as long as people continue ploughing money into market-tracking passive funds.”

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