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A former BlackRock executive has outlined why he now thinks that sustainable investing is a “dangerous placebo that harms the public interest,” after previously evangelizing the trend for the world’s largest asset management firm.

Environmental, social and governance — or ESG — investing has grown increasingly popular in recent years, mainly in the wake of the coronavirus pandemic.

A report published in July, looking at five of the world’s top markets, said that this type of investing had $35.3 trillion in assets under management during 2020, representing more than a third of all assets in those large markets. And the trend is not showing any signs of slowing down.

But Tariq Fancy, who was BlackRock’s first global chief investment officer for sustainable investing between 2018 and 2019, warned that there were some fallacies associated with this area.

Photo courtesy of Bud Helisson.