Asset Allocation | ESG & Climate Change
How to Build Eco-Friendly Portfolios (Without Losing Returns)
- By Sam van de Schootbrugge
- 7 min read
Summary
• A new BIS working paper examines how decreasing carbon footprints impacts a passive investor’s portfolio performance.
• By excluding only the most-polluting firms from a portfolio of MSCI All Country World Index constituents, investors can massively reduce their carbon footprints.
• Most importantly, though, this emissions reduction does not sacrifice expected returns and can preserve existing sectoral and regional exposures.
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