The Financial Times noted today that many large investors are now looking for companies to detail their carbon emissions. This trend got attention earlier in the month when Chris Hohn/TCI noted opposition to re-election of directors for companies not fully disclosing their carbon emissions. However, the impact of this change is limited by the large number of institutional assets (we are talking about our pension funds amongst others) that invest via passive index funds. Reuters has reported that the large index providers (MSCI, S&P Dow Jones, FTSE Russell) are looking at ways to accelerate the inclusion of Aramco in their indexes. This means that trillions of dollars of assets will be shifted into an oil giant. Clearly there is an issue to be addressed for making passive investments based on index providers socially and environmentally responsible. How can we as investors directly or through our pension funds address this issue?
(p.s. Thanks to my friend Jan for alerting me to the Reuters article)
