The illusion of a better world burst when Bill Gates scratched his head in 2018. With his pink tank top, the multi-billionaire leaned against the gray wing chair, on a stage at Stanford University he was supposed to speak about energy issues. But even if the setting initially looked like a multi-billionaire fairy tale hour, it should be Gates Expressions in themselves to have. Financiers, he said, now thought of themselves as magicians. Believed they could change the world by nudging a few numbers from left to right in Excel. Sell dirty stocks? “So far, this has not reduced a single ton of CO₂,” continued Gates later after.
With this, Gates challenged a story that fund companies are only too happy to try: Whoever throws coal, oil and nuclear stocks out of the fund is doing something good for the environment. The Dutch pension fund ABP – after all the largest in Europe – wants to get out of coal, oil and gas by 2023. The only flaw: So far, experts have repeatedly complained that mass sales of dirty stocks can hardly be translated into a better carbon footprint. Because when a fund sells the shares, other investors who are less interested in the environment will take action. In the end, the company, according to the reading, could largely make no difference.
Now, for the first time, financial market researchers at the University of Augsburg can object to critics such as Bill Gates in a study. In a paperThe researchers Martin Rohleder, Marco Wilkens and Jonas Zink have found astonishing things, which the SZ has received in advance: When funds sell off massive amounts of dirty shares, not only do their prices fall disproportionately – the companies even reduce their CO₂ emissions on average in the following years .
To find out, the researchers examined more than 4,000 funds from the United States and Europe. The dataset thus comprises the gigantic fortune totaling $ 5.7 trillion. From these funds, the researchers filtered out those events in which the funds clearly wanted to reduce their carbon footprint – and sold dirty stocks.
The astonishing result: stocks that were caught in such sales campaigns fell significantly on average in the following months. Within two years of the time of sale, their prices fell by an average of almost 6.7 percent and thus more significantly than other stocks. Apparently, the companies affected then even tinkered with their CO₂ emissions, after all, these emissions fell by an average of 2.3 percent within four years. By way of comparison: in the case of other stocks examined, the emissions usually continued to rise cheerfully.
Some nuns deliberately invest in gun companies
However, many fund companies in Germany are still hesitant, even in sectors such as coal, to hurl the corresponding shares completely and promptly from their portfolios. Many finance professionals would rather accompany the coal companies “on their way to decarbonization”. In other words, you remain at least partially invested.
On average, it would be extremely easy for the fund managers to dramatically improve their own carbon footprint. The study by the Augsburg researchers shows that on average they would only have to sell a single share in order to reduce the fund’s CO₂ intensity by around a quarter. In concrete terms, this means that if fund managers throw the dirtiest share out of their portfolio, this only affects 1.5 percent of the fund volume – but it lowers the portfolio’s CO₂ intensity by 24 percent. Anyone who sells the five worst stocks can reduce CO₂ emissions per dollar of money invested by almost 60 percent.
Since the study is the first of its kind, many critics will now examine the data carefully. An interesting question, for example, is whether the company’s CO₂ emissions will remain lower in the long term. So far, the researchers have only traced this balance up to a maximum of four years after the sale, a very short period of time from a scientific point of view.
Nevertheless, the study provides skeptics with scientific data for the first time, so they might join so-called divestment initiatives and no longer tolerate problematic stocks in their own portfolios, but rather sell them off. In total, more than 1,300 institutions have publicly announced the sale of dubious stocks, and in total they manage more than 14 trillion dollars.
Incidentally, some nuns in the USA are treading the exact opposite path. You consciously invest in the shares of weapons manufacturers – in order to then bring the company under a lot of pressure.