A number of mutual funds and pension plans are investing in China’s thriving coal industry, the Associated Press reports. But unsafe worker conditions and pollution could create a backlash by socially responsible and sustainability investors.

One Chinese financial firm owns 80% of the largest coal company in China, China Shenhua Energy, but U.S. companies own the remaining 20%, including Fidelity, OppenheimerFunds and Merrill Lynch. Between July and September, the stock soared 65%, whereas one of the leading coal companies in the U.S., Peabody Energy, fell 3%.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.