Environmental Indices Offer Alternative to Divestment

RobecoSam’s publication today of its Industry Group Leader rankings, part of the annual Dow Jones Sustainability Indices review, is a good reminder of the stark differences between two investment strategies: divestment and ESG screening.

RobecoSam identified what it believes are the most sustainable companies in 24 sectors – and that includes industries not traditionally seen as “green,” such as energy, transportation and utilities. In energy, the top company was BG Group, an integrated natural gas company based in the UK. The company earned $8 billion profit last year on nearly $19 billion of income.

Campaigns to persuade universities to divest from oil and gas producers have received a lot of publicity over the past few years. But some argue that a more nuanced system – rewarding those companies that set a sustainable example for their sector, rather than punishing entire industries – may be a better way to go.

For example, retired trader Rebekah Helzel tells the New York Times that she has invested in UPS because of the innovative steps the company has taken to reduce carbon emissions. Now that Dow Jones has added UPS to its index, she probably won’t be the only one.

Tamar Wilner is Senior Editor at Environmental Leader PRO.