By Pilita Clark, Financial Times Environment Correspondent [Cross-Posted from the FT.com]
In a sign that a global campaign against fossil fuels is entering the financial mainstream, companies that extract or explore for such fuels are excluded from a new set of indices created by FTSE, a large provider of stock market indexes
Several market benchmarks have already been developed to cover companies likely to profit from tougher environmental regulations, such as renewable energy or water management groups.
But the FTSE ones are believed to be the first from a leading index group that specifically bar fossil fuel companies.
A precise list of excluded companies has not been released but some of the best known names on the London Stock Exchange will be targeted, from oil and gas producer BP to coal miner BHP Billiton.
The groups that are included range from tech giants such as Apple, Google and Microsoft to a number of large US banks and pharmaceutical companies such as Johnson & Johnson of the US and Switzerland’s Roche.
The move comes as climate-change activists tack towards arguing that fossil fuels are not just dangerous for the environment but an increasingly risky financial bet with governments considering tougher action to curb global warming.
This has prompted growing interest from investors keen to understand the risks of fossil fuel holdings, said Kevin Bourne, a FTSE managing director.
“This is one of the fastest-moving debates I think I’ve seen in my 30 years in markets,” he said.
A US campaign modelled on the 1980s anti-apartheid divestment movement has led several small colleges and endowments there to sell out of their fossil fuel holdings.
But larger groups, including Harvard University, have resisted pressure to follow. The FTSE indices are part of an effort to broaden the campaign further.
[Please continue reading at the FT’s “FTSE joins Blackrock to help investors avoid fossil fuels.”]
