FTSE Russell said clients have asked whether they need to reduce holdings in profitable technology stocks because of the environmental, social, and governance impact of artificial intelligence development goals in the sector. According to Sina Finance, FTSE Russell said it will assess each technology company’s sustainability risks on a case-by-case basis, and Lee Clements said the index provider would gradually adjust weights among different technology companies when necessary to reflect those risks.
Clements, head of sustainable investment research at FTSE Russell, said clients have begun asking whether the climate footprint of hyperscale cloud providers would automatically reduce their weight in sustainable indexes. FTSE Russell did not name any specific companies. About $330 billion in passive funds track FTSE Russell sustainable indexes, and the total assets benchmarked to such indexes may be even larger.