Passive managers urged to do more to exclude ‘coal laggards’ Financial TimesPassive managers urged to do more to exclude ‘coal laggards’ Financial TimesPassive managers urged to do more to exclude ‘coal laggards’ Financial Times
Impact Investing Forum 2024
London. April 24-25, 2023.
Passive fund houses are being urged to press index providers to remove “coal laggards”, which could help to transition to net zero. Experts said that passive funds face the risk of losing clients if the indices they track are updated to incorporate ESG criteria.
“Right now, they are cherry picking and using the excuse that “our clients still want exposure to the FTSE 100′ […] Providers really want to have their cake and eat it too,” O’Riordan said. “Right now they are cherry picking and using as an excuse that “our clients still want exposure the FTSE 100′ Providers really want their cake and eat it too,” O’Riordan stated. “If [asset managers] were really serious about ESG, and not just treating it as an opportunity to sell more products, then they would change their entire investment process and fully integrate ESG.” Jay Watson, head quantitative analytics at The Index Standard, said that changing existing indices to ESG “undermine investors’s confidence in the whole index concepts.” It may be a smart decision to buy an electric car rather than a petrol-engined one. However, your garage may replace the engine of your car with an electric motor and battery at your car’s annual maintenance without telling you. Watson stated that more choice is one way to encourage more investors to adopt sustainability strategies. Investors can make informed decisions if there is clarity and transparency in reporting and disclosures. “The challenge of making investing more sustainable does not lie solely with the market. She said that the challenge of making investing more sustainable is not just a market responsibility. “Governments, regulators and investors all have a role in that total system change.” *Ignites Europe, a news service published daily by FT Specialist for professionals in the asset management industry, is a news service. It covers everything, from product launches to industry trends and regulations. You can get trial and subscriptions at igniteseurope.com