I see that this post has received a couple of downvotes since the last time I checked. I really wish that those voters would leave a comment to explain why they didn’t like the post, or ways in which they thought it could be improved.
I don’t necessarily agree with every point of the authors’ argument, but they’ve made an honest attempt to contribute to an ongoing conversation from an angle not mentioned by Halstead and Hillebrandt. They laid out their argument clearly and cited sources, something I’m happy to see more of on the Forum.
Downvotes seem to imply one of the following things:
1. Someone thinks they’ve made one or more mistakes on the post (but hasn’t pointed out those mistakes).
2. Someone doesn’t like the way the post was written/​formatted (but hasn’t explained how in a way that could help the authors improve the post).
3. Someone doesn’t like impact investing and downvotes posts that favor it, even if they haven’t examined the arguments behind those posts.
I could understand (3) for posts about something either totally irrelevant to EA, or something philosophically opposed to EA, but not for a topic like impact investing, which is at least a plausible path toward impact. Even if someone doesn’t think the area is important or tractable enough to be worth discussing, I wish they’d take the time to leave a comment explaining that.
I downvoted because the arguments that impact investing funds would outperform funds purely optimized for profit seemed quite naive, and indicated a lack of some basic microeconomic intuitions that made me strongly distrust the rest of the post.
The study linked helped a bit, though I easily found meta analyses with the opposite conclusion, and also it’s a kind of domain where I would expect empirical studies to be pretty easily fudged to give the socially approved conclusion.
Also some general feeling of distrust of someone advocating for an intervention that they are financially benefited by, though that was much weaker evidence and I recognize that people who work in this space are probably also the ones who think most about it.
That feels overly harsh given that many economists apparently accept that SRI doesn’t undermine the bottom line. Its weird to downvote something held by a significant chunk of economists for being naive.
I’d like to highlight the distinction between ‘impact investing funds would outperform funds purely optimized for profit’ and ‘SRI doesn’t undermine the bottom line’. In markets as efficient as I think publicly traded stocks are, the former is highly improbable and the latter is highly probable.
The blog post appears to make both claims. Habryka’s complaint may seem more defensible to you if it is entirely about the former claim.
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Two technical notes on this distinction:
Given the existence of some low-quality evidence for the strong (outperformance) claim, you might argue that that too is not so naive.
Of course, SRI typically reduces diversification, with an effect somewhere between negligible and substantial depending on the strategy, making the weak (doesn’t undermine) claim misleading in some situations, even with efficient markets.
All I (personally, can’t speak for Max) tried to convey was that there is substantial evidence that impact investing has not led to underperformance (can’t say anything about the future because as every financial disclaimer says: past performance is not indicative of future results).
Of course, studies showing historical outperformance from ESG are useful to make Kit’s latter point that SRI has not undermined the bottom line
I see that this post has received a couple of downvotes since the last time I checked. I really wish that those voters would leave a comment to explain why they didn’t like the post, or ways in which they thought it could be improved.
I don’t necessarily agree with every point of the authors’ argument, but they’ve made an honest attempt to contribute to an ongoing conversation from an angle not mentioned by Halstead and Hillebrandt. They laid out their argument clearly and cited sources, something I’m happy to see more of on the Forum.
Downvotes seem to imply one of the following things:
1. Someone thinks they’ve made one or more mistakes on the post (but hasn’t pointed out those mistakes).
2. Someone doesn’t like the way the post was written/​formatted (but hasn’t explained how in a way that could help the authors improve the post).
3. Someone doesn’t like impact investing and downvotes posts that favor it, even if they haven’t examined the arguments behind those posts.
I could understand (3) for posts about something either totally irrelevant to EA, or something philosophically opposed to EA, but not for a topic like impact investing, which is at least a plausible path toward impact. Even if someone doesn’t think the area is important or tractable enough to be worth discussing, I wish they’d take the time to leave a comment explaining that.
I downvoted because the arguments that impact investing funds would outperform funds purely optimized for profit seemed quite naive, and indicated a lack of some basic microeconomic intuitions that made me strongly distrust the rest of the post.
The study linked helped a bit, though I easily found meta analyses with the opposite conclusion, and also it’s a kind of domain where I would expect empirical studies to be pretty easily fudged to give the socially approved conclusion.
Also some general feeling of distrust of someone advocating for an intervention that they are financially benefited by, though that was much weaker evidence and I recognize that people who work in this space are probably also the ones who think most about it.
That feels overly harsh given that many economists apparently accept that SRI doesn’t undermine the bottom line. Its weird to downvote something held by a significant chunk of economists for being naive.
I’d like to highlight the distinction between ‘impact investing funds would outperform funds purely optimized for profit’ and ‘SRI doesn’t undermine the bottom line’. In markets as efficient as I think publicly traded stocks are, the former is highly improbable and the latter is highly probable.
The blog post appears to make both claims. Habryka’s complaint may seem more defensible to you if it is entirely about the former claim.
--
Two technical notes on this distinction:
Given the existence of some low-quality evidence for the strong (outperformance) claim, you might argue that that too is not so naive.
Of course, SRI typically reduces diversification, with an effect somewhere between negligible and substantial depending on the strategy, making the weak (doesn’t undermine) claim misleading in some situations, even with efficient markets.
Kit, thanks for making that distinction.
All I (personally, can’t speak for Max) tried to convey was that there is substantial evidence that impact investing has not led to underperformance (can’t say anything about the future because as every financial disclaimer says: past performance is not indicative of future results).
Of course, studies showing historical outperformance from ESG are useful to make Kit’s latter point that SRI has not undermined the bottom line