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The Risks and Poor Returns from Sustainable Investing (Guest: Martin Hutchinson)

January 28, 2019

Professional portfolio managers adopting sustainability criteria as a guide investing their clients’ money threatens to reduce returns and increase risks, often violating the managers fiduciary responsibility.

Former investment banker, Martin Hutchinson's Heartland Institute report, “Fallacies of So-Called ‘Sustainable’ Investments,” highlights portfolio managers who give in to pressure to adopt so-called sustainable investment policies. These managers invest the funds entrusted to them in renewable energy projects instead of from fossil fuels, which may harm their clients’ economic wellbeing for reasons unrelated to improving portfolio performance, thus violating fiduciary duties. Investing in ‘sustainable investments’ is a good way to lose money, says Hutchinson.

H. Sterling Burnett, Ph.D. is a Heartland senior fellow on environmental policy and the managing editor of Environment & Climate News.