In his revealing article about environmental, social and governance funds (“How to separate the good from the bad and ugly ESG funds”, FT.com, September 8), Billy Nauman suggests some investors are trying to “immunise their portfolios from climate risk”. Along with nuclear war and the risk of a future, much worse pandemic, climate change is the ultimate systematic risk, so it cannot be diversified away.

Anyone who thinks they can “immunise” their portfolio from climate change risk doesn’t realise the seriousness of what lies ahead.

And if this is just shorthand for “short fossil fuel stocks”, then it’s a bit late.

Simon Taylor
Professor of Management Practice (Finance), Judge Business School
University of Cambridge, UK

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