Door Freddy Forger
Earlier, we at Stoic wrote this blog about the nonsense of sustainable investing. Don't get us wrong. We also believe the world needs to become greener. But investing in so-called sustainable portfolios simply does not contribute to that. Now, The Great Green Investment Investigation confirms that green investing really is not green.
Sustainable investing is a major hype. In our earlier blog, we compared it to the Catholic indulgence: sustainable investing gives the buyer a good feeling, but does nothing for a better environment. The only party that benefits is the one selling the product.
We sometimes feel like a voice crying in the wilderness with this message. Fortunately, more and more evidence is emerging that exposes the illusion of sustainable investing. Under the title The Great Green Investment Investigation, investigative journalism platforms Investico and Follow the Money conducted a large-scale data investigation into green funds. These funds, often run by well-known players like BlackRock and BNP Paribas, have invested a total of 8.5 billion euros in fossil fuel companies. This is despite the fact that, according to European regulations, their entire portfolios should be 100 percent sustainable. National and European regulators barely verify whether funds are as green as they claim. Investors who think they are contributing to a sustainable future with their savings are in fact investing in companies such as Shell, TotalEnergies and EasyJet, without knowing it.
What can you do to contribute to a better world?
As true Stoics, we believe that when it comes to sustainability, you should focus on what lies within your own control. That could be solar panels on your roof. Or switching to an electric car. If you prefer to stay in the realm of investing, you could participate in an activist shareholder initiative with the goal of enforcing green policy at a listed company. In such cases, increasing the value of your shares is intentionally a secondary goal. Or you could invest in private companies that are specifically developing environmental technologies, for example through Carbon Equity.
But investing your money in a so-called sustainable fund is truly meaningless.
At Stoic, we spread the equity portion of your portfolio as broadly as possible across all global equities. The comforting thought here is that if the sustainability trend genuinely takes hold, it will automatically be reflected in your globally diversified investment portfolio. In short, if you invest ultra-passively in the entire global economy with Stoic and the sustainability trend continues, then you will become a sustainable investor by default. That works just fine.
Door Henk Kras