Investors and others (regulators in particular) should want to do a careful “lessons learnt” exercise about this latest corporate implosion.
Some questions they should ask include:
- How strong is the case that it was a “preventable surprise”?
- Who has what responsibility? As the ownership data shows, index funds have big exposure to this company and it is well recognised that they tend to be passive stewards and misallocate capital.
- Who could/should buy Peabody’s assets and what will happen to GHGs?
- How could Peabody’s post-settlement securities disclosures have prevented this state of affair?
- What should diversified investors do about other fossil fuel companies and sectors that are highly exposed to climate risk?
Past experience suggests investors will try to avoid doing this learning. So the real question is: who will make them do it?