Hedge Funds Are Feasting on ESG’s Profit Leftovers
Disinvestment from polluting companies risks hurting both returns and the planet. Engagement is the better green strategy.
Our lucky day.
Photographer: Matthew Horwood/Getty Images EuropeAsset managers are under increasing pressure to stop investing in companies that worsen the climate emergency through heavy carbon emissions. But recent events suggest that engaging with these companies beats disinvestment as a strategy to improve their environmental performance.
Hedge funds have been making outsized profits buying discarded shares of oil and gas companies, the Financial Times reported last week. Institutional investors “are all so keen to get rid of oil assets, they’re leaving fantastic returns on the table,” Crispin Odey of Odey Asset Management told the newspaper. His European fund has gained more than 100% this year, boosted by investments including Norwegian oil company Aker BP, whose shares have risen by more than a third.