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Why disinvestment remains a solid, long-term investment approach

Mike Thiessen, Genus’ Chief Sustainability Officer, said in a statement, “Over the years, divestment has been clouded by misconceptions among investors that mitigating fossil fuel value chain risk has a negative impact on annual returns. ” “But, this approach is our Fossil Free Fund data shows that disinvestment pays off in the long run.”

In its 2021 disinvestment report, which includes eight years of fossil-free investment data, Genus found that divestment from fossil fuels not only boosts returns, but also reduces portfolio volatility and improves portfolio strength. Is.

Using Genus Capital’s flagship Fossil Free CanGlobe Equity Fund to build a fossil-fuel disinvestment strategy from April 30, 2013 to September 30, 2021, it earned an average return of 13.54% while contributing to climate-focused initiatives. The Fossil Free CanGlobe Equity Fund outperformed its benchmark (12.48%) and the S&P/TSX Composite (9.07%), which includes both coal and large carbon-producing sectors.

The analysis also incorporates improved flexibility of investment, including environmental, social and governance (ESG) aspects as a result of the pandemic.

Canadian investors are becoming aware that divestment is not only an ethically and environmentally responsible option, but also an economically sound one. The report suggests that disinvestment is still a viable option.

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