 Are pension funds actively decarbonizing their portfolios?Martijn Boermans and Rients Galema Ecological Economics, 2019, vol. 161, issue C, 50-60 Abstract: We study whether investors are actively decarbonizing their portfolios. With the adoption of the Paris Agreement in December 2015, a better understanding of portfolio related carbon dioxide (CO2) exposures has become increasingly important for investors, regulators and society at large. Carbon-intensive stocks still carry a substantial weight in common market benchmarks. We analyze if investors are actively divesting by deviating from market benchmark allocations to reduce carbon exposures. We utilize a stock-level holdings dataset of Dutch pension funds over the period 2009–2017 and combine this with firm-level CO2 emissions information to measure the portfolio carbon footprint and active portfolio management. We find that pension funds that deviate from market benchmark weights have substantially lower carbon footprints. This effect is mostly driven by reduced exposures to carbon-intensive industries and is larger for pension funds that measure and report their carbon footprints. We find no evidence that deviations from the market benchmark impair risk-adjusted portfolio performance. Keywords: Carbon footprint; Pension funds; Active portfolio management (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolec:v:161:y:2019:i:c:p:50-60 DOI: 10.1016/j.ecolecon.2019.03.008 Access Statistics for this article Ecological Economics is currently edited by C. J. Cleveland More articles in Ecological Economics from Elsevier |
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