S5 Ep. 4 Green or merely clean? The trouble with ESG investing

Okay.

So I think what I'm hearing in some is that responsible investing is moving from being clean to enabling change one way or another, whether it's having those difficult conversations with high emitters or enabling change through investing in those disruptors who are fighting back against climate change.

So we're moving from just be clean to enabling change.

Given that that's the environment, what do you think investors most need to get right over the next five years?

Over the next five years, I think a lot of investors have done a lot of good things.

I think alignment of strategy is important.

I think that's something that we're seeing more of.

There are examples across Europe where asset owners have decided that their fund manager are not doing things, not doing the influencing that they need to help these companies move along that scale.

So they've changed fund managers.

So making sure that your fund manager is aligned with that and what they're doing is aligned with that transition.

is something that I think will continue to happen, particularly in Europe and probably in Asia.

And then also an appreciation that actually we have to fund solutions.

So making allocations to investments where there is a environmental and or social objective as well as the financial one.

So you're seeking market rate returns as well as another objective.

That's really interesting.

I really appreciate your perspectives on that because what I'm taking out of this is there's almost a false equivalent.

It's become this hot potato ESG.

Well, actually, it's really just common sense, really, isn't it? That it's such a massive, exogenous risk that investors have to take it on board.