August 30

Viewpoint: ESG Critics Could be Leaving Money on the Table – And Missing an Opportunity to Make a Real Impact

In recent years, several converging forces have led businesses to take on a greater share of the responsibility to address key challenges across environmental sustainability, social justice, and corporate governance–the field termed “ESG.”

Investors, recognizing the impact of their decisions on these issues, have dramatically increased their appetite for ESG investments. As the demand for valid ESG investments outstripped the supply, asset managers began to sell ESG products that didn’t really qualify, giving rise to several greenwashing scandals.

ESG has come under intense criticism, with billionaires Peter Thiel and Elon Musk lambasting it as a “hate factory for naming enemies” and a “scam,” respectively. While their concerns are bombastically overstated, as scrutiny of the sector mounts, discerning ESG investors will have an opportunity to advance their investment strategies to maximize both impact and returns.

Photo: Akil Mazumder


Source: Fortune (link opens in a new window)

ESG, impact investing