Giving carbon credit: climate as a performance indicator - Natixis Investment Managers (Mirova)

The global consensus is that reducing greenhouse gas emissions as quickly as possible is the only sure way to stave off the worst of climate change. But what does this mean from an investment perspective?

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... The surest way to avoid investments in highly emitting companies is by divesting from fossil fuels. Excluding oil and gas, fossil fuel-fired utilities, and coal mining mean fewer financed greenhouse gas emissions. But, blindly excluding the energy sector can also mean portfolios composed entirely of healthcare companies or technology. These companies contribute little to overall carbon emissions, so a portfolio entirely composed of them is not necessarily better than the status quo. This highlights the need for investors to focus on solutions that facilitate the transition to a more sustainable economy, from products and services that improve energy efficiency to renewable energy systems, electric vehicles, and more.

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