OK, this is purely theoretical, but bear with me.
We all know coal mining is bad. Air pollution from coal-fired power stations is linked with asthma, cancer and other lung problems. Sulphur dioxide emissions cause acid rain. Coal mines pollute waterways and (in some countries) kill and injure workers. Global warming - don’t get me started. In the US alone, coal accounts for around 25 percent of all energy-related carbon emissions.
Seems a no-brainer we shouldn’t be investing our money in companies producing and burning coal. We should all be excluding coal miners from our KiwiSaver and other investment portfolios.
The trouble is, us all excluding coal mining from our investments doesn’t stop other people putting money into coal. Some other people will keep investing; people who don’t care where their investment is going as long as it makes short term returns.
Remember this next bit is theoretical; an intellectual argument. But imagine a scenario where a whole load of ethical investors put money into coal producers and coal-fired electricity generators. Lots of money. And then started using their investor power to pressure those companies to switch from coal.
These investors start turning up at AGMs. Visiting boardrooms. Telling these companies: Mine something else. Use something else in your power plant. Drop coal.
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