Pay Close Attention to What’s in Your Ethical Fund
Thinking of putting your money into a fund that describes itself as ethical? You’d better read the fine print if backing Exxon Mobil Corp. and British American Tobacco Plc isn’t your idea of doing good.
The oil company accused of misleading investors by hiding evidence about climate change and Europe’s biggest cigarette maker are among the holdings of some of the 30 biggest funds that invest following environmental or social governance guidelines, according to data compiled by Bloomberg.
While some funds are strict about supporting only clean-energy producers, others buy securities from Big Oil to Big Tobacco along with consumer brands such as Unilever and Facebook Inc. The wide range of holdings is the result of each institution deciding on its own what meets the ethical threshold. Loosening that definition has helped ethical investing grow about 80 percent over the past five years to $223 billion, data compiled by Bloomberg show.