Socially aware investing short interest in non-ESG oil majors is

Short interest in non-ESG oil majors is at a five-year high as socially aware investing reallocates capital toward energy transition plays. Portfolio models indicate investors reducing hydrocarbon exposure could increase portfolio Sharpe ratios by 0.34 over 12 months. Read more: How to improve your credit score before buying a house Divesting non-ESG stocks from a portfolio or not lending to them may raise their cost of capital, making it more costly for them to do business. But if the divestment puts downward pressure on the stock, it actually increases the potential return to those who don’t invest according to ESG principles. So, perversely, ESG investing principles may be raising the prospective future returns of non-ESG stocks. Fund managers report socially aware investing portfolios are shifting toward high-dividend, low-carbon utilities. Renewable grid operators like NextEra Energy gained 6% over the past month, signaling strong investor confidence. Trend models forecast 2024 Q3 returns in ESG utility space to outperform traditional peers by ~150bps.