And do they also represent a threat to index investors as they become the "holders of last resort" as the carbon bubble pops? Some interesting perspective in this report:
I've gone to 100% ESGV +VSGX.
When you dig a little deeper, you might question if this is really trying to avoid the industry, or just specific companies. Here's part of Vanguard's description of Vanguard ESG U.S. Stock ETF (ESGV):
"Specifically excludes stocks of companies in the following industries: adult entertainment, alcohol and tobacco, weapons, fossil fuels, gambling, and nuclear power"
Okay, so no companies in the fossil fuels industry. But now look at the portfolio page, and click on portfolio holdings:
https://investor.vanguard.com/etf/profile/portfolio/esgvHoldings 90-120 are where it gets interesting...
Schlumberger Ltd. - they provide services for oil companies, like the platforms. If the oil industry disappeared tomorrow, this company would go bankrupt.
Phillips 66 - Owns numerous gas stations and jet fueling stations. No fossil fuels, they also go bankrupt.
Technically I guess they don't produce fossil fuels - but both companies are completely dependent on the industry.