4 Features Of The Modern ESG Landscape

We begin our brief narrative where the Wall Street Journal ended its coverage late last month: ‘Investors want to make money while feeling they are contributing to a more sustainable and fair world. Given the demand, firms are rushing to classify their investment offers as ESG-friendly, sometimes stretching the definition, or making overblown claims.’

‘The definition of what ESG or responsible investment truly is has been up for debate ever since it was created,’ a portfolio manager told the Financial Times, injecting professional sang-froid into an investigation of the asset management unit of Deutsche Bank, DWS, by regulators in Germany and the U.S. for alleged ‘greenwashing.’

One could blame poor data for the pickle DWS and many other asset managers are in. A survey by BlackRock of 425 institutional investors found that poor quality or availability of ESG data and analytics represent the biggest obstacle to sustainable investing. Or, one could blame the overall conceptual ESG framework, characterized by a Securities and Exchange commissioner (SEC) as ‘labelling based on incomplete information, public shaming, and shunning wrapped in moral rhetoric preached with cold-hearted, self-righteous oblivion to the consequences, which ultimately fall on real people.’