Institutional Investor

Divesting is ‘counterproductive,’ new research says

In the divestment versus engagement debate, climate-conscious institutional investors have generally tried for the last decade to “tilt” their portfolios away from heavy carbon emitters and toward companies with lower carbon footprints. But tilting may not be enough.

According to a paper co-authored by GSEM Professor Philipp Krüger, while tilting away from high emitters and toward low carbon emitters may reduce the overall emissions of climate conscious institutional portfolios, the pollution doesn’t go away. Instead, it goes into the hands of other, potentially less environmentally responsible investors.

> Read the full paper, Decarbonizing Institutional Investor Portfolios


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