The Truth is Powerful

To Fight Climate Change, Should Green Investors Reconsider Big Oil?

Sustainability funds eschew some of the biggest backers of green technology: oil companies. Research … [+] by Kristen Senz

Should eco-conscious investors support a company that’s developing innovative solutions to climate change—even if that company is also a major polluter?

The market’s answer to this question has been a resounding “no,” as evidenced by the investment policies that exclude traditional oil producers from most so-called sustainable funds. But this stance eliminates some of the most prolific and influential producers of green innovation, including Exxon Mobil, BP, and Chevron, according to recent research by Harvard Business School Professor Lauren Cohen.

Faced with mounting concerns about climate change, oil companies are diversifying their businesses, putting money toward renewable energy sources and green technology. While sustainable funds shun fossil fuel producers, which contribute half of the world’s greenhouse gases , Cohen’s study suggests that these companies could also play a key role in stemming the damage.

“They are investing about three times more than the average firm in climate change mitigation technology,” says Cohen, the L.E. Simmons Professor of Business Administration at Harvard Business School. “This is technology that’s going to help us to abate these issues around energy and climate, and it’s the best […]

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