That’s what I saw on the inside, and I don’t know that everyone who is in ESG has really figured that out. It’s just marketing to preserve the existing system. They’re seeing a system that clearly, every year, claims it’s doing all these great things, ESG as-sets are increasing, what I call “sustainababble” is increasing, and it’s increasing alongside carbon emissions and inequality, because the way they’ve built these things, there’s no link between one or the other.
They don’t get anything,” or, “They don’t get it.” I’m like, “No, no, no. I think it’s ridiculous when I hear boomers blame it on millennials. Over 50 percent of millennials don’t believe in capitalism. At some point, we have to accept that mil-lennials. That’s led to a space where the majority of products being sold as ESG have little to no measur-able impact. They’re going to move quickly and start occupying that space and realizing that they could just put a green label on most things with a tiny tweak and do it.
The products, because of a lack of any kind of rigor or regulation on what is ESG and what’s not, and what’s an impact and what’s not, have gone in a direction where everything is being sold as ESG because it’s a race to the bottom.Īt some point, if no one is telling you what is really ESG or green or not, as an asset manager, if you leave them a gray area, they don’t leave money on the table. I think to a subset of investment managers and ESG people who are actually inside the system and know that you have to operate according to fiduciary duty, they have convinced themselves that ESG means higher returns, or ideally higher returns and social impact. Creating social impact with your dollars or Wall Street, whatever. Tariq Fancy: ESG, to most of the world and the public, means social impact in some way, shape or form. I thought it might be interesting to start with a pretty simple question, which is, what do you think ESG means to most people, and what do you think it actually means? What are the sustainable-investing criteria? How are they overstating it? Why didn’t anybody notice? I think the whole area is ripe with important areas to discuss. I mean, you could unpack that sentence for hours. The recent news that US authorities are investigating Deutsche Bank’s asset-management arm after the firm’s former head of sustainability said it was overstating how much it used sustainable-investing criteria to manage its assets.
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Luigi and I have had this discussion before that we’re a little bit skeptical of ESG, and particular-ly as I see the Wall Street marketing machine rolling into full gear to convince people to put their money into ESG investing, I wonder, well, is it really doing what people say it’s going to do? That we can take into account all these factors that are important to us social-ly. Speaker 9: ESG, of course, has become a buzzword on the Street as companies face pressures from investors to be more transparent-īethany: It’s this relatively new idea that we should apply nonfinancial metrics to gauge the appropriateness of investments, and that by doing this, we can essentially make the world a better place. ESG, as you all probably know, stands for environmental, social, and governance. Speaker 8: A provocative new op-ed from BlackRock’s former CIO of sustainable invest-ing claims, “The financial-services industry is duping the American public with its pro-environment, sustainable-investing practices.”īethany: Tariq’s criticism is focused on some of the mechanisms of ESG investing. He decided to leave BlackRock and decided, actually, to come clean, at least in his view, about what ESG investment, in BlackRock and in general, is about.
In fact, he was a chief investment officer for BlackRock. Luigi: I discovered on the internet a pamphlet by this guy called Tariq Fancy, who used to work for BlackRock. I don’t think we should kill the capitalist system in the process. Warren Buffett: We ought to do better by the people that get left behind. Luigi: And, most importantly, what isn’t. Milton Friedman: First of all, tell me, is there some society you know that doesn’t run on greed? Phil Donahue: Did you ever have a moment of doubt about capitalism and whether greed’s a good idea?īernie Sanders: We have socialism for the very rich, rugged individualism for the poor.īethany: This is Capitalisn’t, a podcast about what is working in capitalism. I think it makes it hard for people to understand that there’s going to be some hard decisions that are going to cost some money, and the people who can pay the most, and understand and believe in the science, may have to-for the future of the country and their own children-step up. It’s kind of like neoliberalism with moral satisfaction draped around it. Tariq Fancy: ESG basically allows people to sort of say.
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