The AFR reports Alan Oxley as saying “The reality is fossil fuel companies make such an important contribution to the earnings to our stock exchange, so any investor who drops them out will not be able to deliver the proper return to investors.”
The AFR did not report that Alan Oxley has been paid by the Minerals Council of Australia to try to slow the divestment movement. Nor did the AFR mention the ongoing plunge in coal company market capitalisation and rising risks to all fossil fuel assets.
There are a growing number of fossil fuel free indexes that provide comparable risk-return characteristics to the baseline index. Many have in fact outperformed in recent years.
For investors who decide they cannot divest in full, there are other serious ways to mitigate risks from stranding fossil fuel assets.
It is a shame the AFR did not report on a recent well attended investor briefing in Sydney that explained options available to investors for dealing with fossil fuel risk. One wonders if the AFR is really reporting what its readers want to read.