IEEFA: Major investment advisors BlackRock and Meketa provide a fiduciary path through the energy transition

Two major financial management firms, BlackRock and Meketa, have separately concluded that investment funds have experienced no negative financial impacts  from divesting from fossil fuels. In fact, they found evidence of modest improvement in fund return, according to draft reports undertaken at the request of New York City’s comptroller on behalf of three of the city’s pension funds.

Several of their core findings are noteworthy:

• Divestment actions by hundreds of funds worldwide have passed the prudence tests required of fiduciaries.

• Fossil fuel stocks have underperformed for the last five years and forward-looking analysis shows they are exposed to significant regulatory, technological and market risks.

• Transition readiness standards allow Funds to improve their targeting of how divestment can take place in a way that aligns with the philosophy and mission of a specific Fund.

• There is no uniform model for divestment. Some funds divested from coal but most adopted broader divestment strategies across the coal, oil and gas sectors. All divestment options have proven to be financially sound.

• The global trend in the investment world is toward more public pension fund divestment from fossil fuels. In the past, such actions were mostly consigned to university, foundations and other private institutions. The size of individual Funds that are currently divesting is increasing.

For the full article, click here: https://ieefa.org/major-investment-advisors-blackrock-and-meketa-provide-a-fiduciary-path-through-the-energy-transition/