How passive investment dulls the green wave (FT)

https://on.ft.com/2Sqcjbn

Passive index trackers help to keep money flowing to high-carbon industries

With such a strong financial case against fossil fuels coming into focus, and starting to convince holdouts, activists’ plans to starve oil, gas and coal companies of capital should get a boost as investors abandon the sector for non-ideological reasons. 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.

Author: Christopher K. Merker, Ph.D., CFA

Christopher K. Merker, PhD, CFA, is a director with Private Asset Management at Robert W. Baird & Co. He holds a PhD in investment governance and fiduciary effectiveness from Marquette University, where he has taught the course “Sustainable Finance” since 2009. Executive director of Fund Governance Analytics (FGA), an ESG research partnership with Marquette University, he is a member of the CFA Institute ESG Working Group, an international committee currently exploring ESG standards, publishes the blog, Sustainable Finance, which covers current topics around governance and sustainability in investing, and is co-author of the book, The Trustee Governance Guide: The Five Imperatives of 21st Century Investing.