Expanding the Legacy
Tag: ESG
3 Posts
UN Climate Fails: Still Expecting a Different Outcome
Turkeys do not usually vote for Christmas. Still, some people seem genuinely surprised and dismayed by the species’ instinct for self-preservation. Azerbaijan derives more than ninety percent of its export earnings from the sale of oil and natural gas. Each day, the country pumps about 750,000 barrels of oil and dumps 650,000 of them on the global market, bringing in close to $20 billion annually. In November, Azerbaijan is to host COP29, the annual gathering of some forty thousand jet-setting government officials, NGO delegates, and assorted camp followers such as staff, guests, reporters, and ‘parties overflow’, i.e. the merely curious who are allowed to nose around the conference premises as long as they do not partake in the proceedings.
The Folly of ESG and Other Hypes
Corporates of all sizes used to crave recognition for their embrace of wholesome ESG values. Environment, Social, and Governance were deemed all important to woo both customers and investors. Promises and commitments were made, examples set, and case stories published - all to great acclaim. Now, just a few years later, the hype has thankfully abated. As a concept or philosophy, ESG has been exposed as mere window dressing. It also proved the downfall of that most maligned of corporate events, the World Economic Forum. The annual fest turned into a platform of smoke and mirrors used by grandstanding CEOs to establish their ESG credentials: they would care for the environment, combat inequality, and offer full transparency - all the while offering investors ever higher returns.
Pinch, Push, and Shift…
Whilst financial markets globally have undergone substantial stress and change, an increasing number of mainstream investors see ESG (Environmental, Social, and Governance) integration as a way to improve their long-term financial performance and to respond to increased client demand for sustainable investments. This trend offers companies opportunities to attract long-term investors whilst, at the same time, reduce shareholder turnover by aligning their investment strategy with the real needs of their business and laying down the foundation for a sustainable future. Asset owners see ESG integration as an opportunity to generate long-term performance while fulfilling their fiduciary obligations, whilst investment managers see it as a way to improve risk management in the financial performance of their investment portfolio.
