Thanks for writing this up, I’ve been super interested in this since Matt Levine started discussing asset managers like BlackRock having an impact through their climate related investing strategies. It would be so great if this would turn out to be a mechanism to coordinate patient and safe AI development among AI companies and governments.
Random things:
recent working paper finding that big asset managers are currently voting against environmentally friendly actions [Tweet] (I suppose it’s likely that with discount rates & predominant investment in regions relatively less affected by climate change, this might be profit maximizing even as a relatively universal owner)
A fine-gained analysis shows that the combined voting decisions of the Big Three are more likely to lead to the failure of environmental resolutions and that, whether they succeed or fail, these resolutions tend to be narrow in scope and piecemeal in nature
somebody mentioned that it might be surprising that those big money asset managers didn’t seem to get much involved in Covid, e.g. by making investments in vaccine research and rollouts, as they internalized a big chunk of the economic fallout
I wondered how much less promising this strategy is for coordinating with Chinese firms, as I have the superficial impression that investors have much less influence there
The tweet you linked to cites a paper which looks really good and highlights the fact that ESG is not high impact now. Thanks.
I think your point around COVID is an interesting one. I guess one of the complications with COVID is that it initially did cause markets to tumble, but they then recovered rather handsomely, which risks skewing the incentives. (I discussed why this might have happened in sections 4.3 and repeated this in section 11.3 of this post).
Your query about China is a good one. In principle, UO should be appealing to Chinese investors too—it requires no altruism on the part of the investor, it only requires the investor to want to maximise the returns across the whole portfolio… that said, I suspect it may well fail to reach certain corners of the investor universe, and China may well be one of them. In section 6, I discuss the extent to which this concept may work without covering all investors. I was going to add more in there about the international dimensions to this, but the post is long enough as it is! It’s interesting to note though, that at least with regard to coal, the biggest sources of lending finance to new coal plants are Japanese (source: p8 of this Boston Uni report) My intuitive guess is that it would be easier to get these ideas to take hold in Japan than in China (indeed, I believe that Japan’s government pension scheme is already interested in Universal Ownership)
Thanks for writing this up, I’ve been super interested in this since Matt Levine started discussing asset managers like BlackRock having an impact through their climate related investing strategies. It would be so great if this would turn out to be a mechanism to coordinate patient and safe AI development among AI companies and governments.
Random things:
recent working paper finding that big asset managers are currently voting against environmentally friendly actions [Tweet] (I suppose it’s likely that with discount rates & predominant investment in regions relatively less affected by climate change, this might be profit maximizing even as a relatively universal owner)
somebody mentioned that it might be surprising that those big money asset managers didn’t seem to get much involved in Covid, e.g. by making investments in vaccine research and rollouts, as they internalized a big chunk of the economic fallout
I wondered how much less promising this strategy is for coordinating with Chinese firms, as I have the superficial impression that investors have much less influence there
Thanks very much MaxRa.
The tweet you linked to cites a paper which looks really good and highlights the fact that ESG is not high impact now. Thanks.
I think your point around COVID is an interesting one. I guess one of the complications with COVID is that it initially did cause markets to tumble, but they then recovered rather handsomely, which risks skewing the incentives. (I discussed why this might have happened in sections 4.3 and repeated this in section 11.3 of this post).
Your query about China is a good one. In principle, UO should be appealing to Chinese investors too—it requires no altruism on the part of the investor, it only requires the investor to want to maximise the returns across the whole portfolio… that said, I suspect it may well fail to reach certain corners of the investor universe, and China may well be one of them. In section 6, I discuss the extent to which this concept may work without covering all investors. I was going to add more in there about the international dimensions to this, but the post is long enough as it is! It’s interesting to note though, that at least with regard to coal, the biggest sources of lending finance to new coal plants are Japanese (source: p8 of this Boston Uni report) My intuitive guess is that it would be easier to get these ideas to take hold in Japan than in China (indeed, I believe that Japan’s government pension scheme is already interested in Universal Ownership)