Can a Responsible Investor Invest in Commodity Futures? – Winter 2020

Efficient institutional investment portfolios are exposed to commodity derivatives. Nevertheless, the current lack of coherent industry guidance on the Environmental, Social and Governance (ESG) impact of commodity futures may lead some investors to consider even excluding these assets. In this article the author systematically studies the question, “Can a responsible investor invest in commodity futures?” The article lays out a taxonomy of perceived issues and then proceeds to discuss these issues in light of available guidelines and the relevant academic research. Lastly, the author offers two actions that responsible investors exposed to commodity futures should consider.