May 3, 2023
It is a term that was first coined in 2005, through the United Nations. ESG … Environment, Social, Governance … were three letters that no one could have imagined, placed in just the right order, would form the beginning of the sustainable investment movement.
But with its invention and embrace from the investment community, there has been an inevitable backlash in these divisively political times. It was even brought up at the recent IVCA Spring luncheon, in which one panelist observed that the term itself can be separated from “ … establishing similar policies that in the end save money, then it becomes a net-net value creation.”
Currently, the conversation is a debate, as ESG has been lumped into other terms such as political correctness or “woke.” To expand upon the topic, the following online articles and podcasts shed some light on the continuing discourse on the investment parameters of Environment, Social and Governance … ESG.
Fortune.com, ’What is ESG and Why Do Some Hate it so Much?’
An Overview of ESG and the Current Political Consequence: “The ESG industry, meanwhile, says it helps highlight companies that may be riskier than traditional investing guidelines alone might suggest. That could lead to more stable, safer returns for savers. It also says using an ESG lens could help investors find better, more profitable opportunities.”
SPGlobal.com, ‘A Fiduciary Question Looms Large Over the ESG Debate in 2023’
The debate over firms using environmental, social and governance criteria to evaluate investments is often cast in political terms, as if a fund can join Team Red or Team Blue. But at the core of the disputes are fundamental disagreements over the fiduciary responsibilities of pension fund managers and investment firms, and even how to define ESG.
HBR.com, ‘Rescuing ESG from the Culture Wars’
Harvard Business Review: “The upcoming congressional hearings on ESG present an opportunity to put facts on the record and to begin the process of working toward a bipartisan consensus that will take the political passion out of ESG. Far from enflaming passions, we hope that hearings will make ESG boring again.”
TechTarget.com, ‘Five ESG Benefit for Businesses’
Investors increasingly are hopping on the ESG train, while the COVID-19 pandemic, concerns over climate change, growing numbers of cyber incidents, global supply chain issues, economic gaps and social justice movements have become catalysts for spiking adoption rates in businesses.
Fortune.com, ‘The ESG Debate Needs an Apolitical Arbiter. Here’s Why the Insurance Industry Gets it Right’
The industry’s apolitical approach to ESG, which is to rely on its power as a risk management framework to identify and measure material financial risks beyond accounting disclosures, is a compelling case study nonetheless.
Bloomberg Law YouTube, ‘ESG Explained: Socially Conscious Capitalism and Its Backlash’
There has been little regulation of ESG so far, but things are changing. Rules are coming both in the U.S. and abroad. In this video, we explain what ESG is, why it’s become such a hot topic and what regulation — and litigation — we can expect in the near future.
WATCH HERE (7 MINUTES): https://youtu.be/-WVdP9ssU2o
IR Magazine Podcast, ‘Inside the ESG Debate’
The IR Magazine team reports live from the floor of the “ESG Integration Forum – Europe” to discuss key highlights from the day and new emerging topics in the ESG space.They sum up key conversations, questions and answers addressed by ESG experts, IROs and delagates at the forum and look at how the industry is tackling hot topics and debates.
Keep up with all the upcoming IVCA events by clicking here.