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75: ESG: Why divestment might hold some nasty surprises
Many investors will still tell you that responsible investment approaches begin and end with negative screens – excluding whole sectors such as oil & gas from portfolios. This is entirely understandable: if an investor wants an ESG integrated portfolio, it seems strange to continue to hold oil stocks. But when you apply this to a market-cap index – such as the MSCI World with its whopping 5% energy weighting – exclusion means allocating more to the technology and finance sectors as a result, perhaps not necessarily the diversification you might have been looking for from an index.
It’s also…
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