One thing I’m unclear on is “To judge whether ESG investing is actually having an impact, we need to look at scenarios where there is a tension between ESG factors and profitability factors.”
In my view, given that businesses / investors aren’t perfect at profit maximisation, it seems like situations where ESG increases profits compared to no ESG should still be thought of as part of ESG’s impact.
I agree with your point that investors have some blind spots, in particular that some areas of finance are not good at incorporating long term considerations.
So I think you’re right, the ESG concept probably could achieve some impact by helping address that sort of blind spot.
I probably should have said something more like “To judge whether I, as someone working in ESG investing, is having material impact, we need to see if I’m actually having an influence on scenarios where there is a tension/trade-off”. This is because ESG-related work is already working to address that blind spot.
Thanks for your posts about ESG!
One thing I’m unclear on is “To judge whether ESG investing is actually having an impact, we need to look at scenarios where there is a tension between ESG factors and profitability factors.”
In my view, given that businesses / investors aren’t perfect at profit maximisation, it seems like situations where ESG increases profits compared to no ESG should still be thought of as part of ESG’s impact.
Thanks for this, good question!
I agree with your point that investors have some blind spots, in particular that some areas of finance are not good at incorporating long term considerations.
So I think you’re right, the ESG concept probably could achieve some impact by helping address that sort of blind spot.
I probably should have said something more like “To judge whether I, as someone working in ESG investing, is having material impact, we need to see if I’m actually having an influence on scenarios where there is a tension/trade-off”. This is because ESG-related work is already working to address that blind spot.