New report proves divestment pays
Vancouver, BC, Sept. 25, 2019 (GLOBE NEWSWIRE) — Genus Capital today released its 2019 Divestment Report on its six-year fossil free investment data, which shows that divesting from fossil fuels has had a positive effect on returns. Investors who divested from fossil fuels from May, 2013 to July, 2019, using Genus Capital’s Fossil Free CanGlobe Equity Fund generated a 12.83 per cent annualized return without contributing to the climate crisis. Genus’ Fossil Free CanGlobe Equity Fund outperformed the returns of its benchmark* and the overall Canadian stock market index, both of which include coal and major carbon-producing industries.
“The data from our Fossil Free funds has been consistent with each year, but what has changed is Canadian investors attitudes towards divestment,” said Genus’ Partner & Director, Sustainable Investments, Mike Thiessen. “Awareness of the climate crisis is at an all-time high, and Canadian investors are responding by asking how they can use their investments as a tool against the climate crisis.”“Our sustainable funds have increased by 245 per cent over the last six years. This trend is set to continue with many new incoming inquiries specifically looking to invest sustainably, which for many Canadians means going fossil-free.”Genus Capital’s Fossil Free performance results are substantiated by research going back over 20 years, which shows that eliminating the fossil fuel sector would have actually had a positive effect on returns. The research results allay the fears of investors who are concerned that divestment from fossil fuel stocks will potentially lead to weaker returns versus the overall market.Here are some additional takeaways from the research:Genus found that optimized portfolios without exposure to companies involved in extracting, refining or transporting fossil fuels can do better than those with investments in energy companies that create mass carbon pollution. The assumption of a return penalty is not consistent with its research.
Genus’ research shows divestment of fossil fuel stocks and prudent, well managed reinvestment in cleaner and more efficient energy solutions, coupled with active stock selection, can be a sound strategy for investors looking to avoid climate-related risks and capitalize on investment opportunities.
Genus believes fossil fuel divestment has the potential to reduce overall portfolio risk (because of energy sector volatility and stranded asset risk) with the transfer of assets from the energy sector to companies in climate-friendly sectors highly correlated with it.Genus’ fossil free equity funds combined Canadian and global stocks into a single optimized strategy that emphasized top industries in each region, helping to fill the energy gaps with strong companies in other economically sensitive sectors with the potential to achieve energy sector-like stock price exposure.The Fossil Free CanGlobe Equity Fund has outperformed its benchmarks* since its inception in 2013. For more information and to view the report, please visit: https://www.genusfossilfree.com/2019-divestment-report/Notes to Editor*The Genus Fossil Free CanGlobe Equity Fund (35% Canada, 65% Global) generated a 12.83% annualized return from May, 2013 to July, 2019. The equity fund’s benchmark, against which performance is measured, generated 11.58% for over six years ended July 31, 2019.*Fossil Free CanGlobe Equity Benchmark: 35% S&P/TSX Composite, 65% MSCI World (04/01/2015 – Present). Benchmark changed from 40% S&P/TSX Composite, 30% MSCI EAFE, 30% S&P 500 (04/09/2013 – 03/31/2015).Past performance is no guarantee of future performance.About Genus Capital Management Inc.Genus Capital Management Inc. is an independent investment management firm based in Vancouver, founded in 1989. Genus is passionate about creating innovative investment solutions that meet our clients’ changing needs. With more than $1.6 billion in assets under management, Genus’ clients include leading environmental organizations, foundations, and individuals across Canada. Today, Genus Capital is at the forefront of Canada’s Divest-Invest movement with a complete suite of fossil fuel free funds that are tailored to meet the needs of investors who wish to invest in a sustainable, clean energy future. Charlotte Gilmour