Think tank: Fossil heavy FTSE 100 exposes investors to risks

 
Clara Guibourg
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Over a fifth of FTSE 100 companies are in the energy or mining sector. (Photo: Getty)

The high level of fossil fuel companies on the FTSE 100 index is exposing investors to unacceptable risks, warns the think tank Bright Blue.

The centre-right think tank released a report calling for more open disclosure of the risks associated with the index. Dependency on resources companies is cited as a main concern.

Just over a fifth of the companies on the FTSE 100 index are mining or energy companies.

“Many of the investments that FTSE 100 investors are exposed to are very risky, environmentally destructive, and have embedded carbon emissions well beyond what can be reasonably combusted to keep climate change within manageable bounds.”

Bright Blue suggests that in order to return to a more “reasonable default level of risk” for investors, the index ought to be more UK focused and less dependent on resources companies.

The Bank of England has touched on the topic previously, warning UK lawmakers in April that climate change is one of the “top risks” the finance industry faces.

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