As ESG has grown in prominence, its critics have grown in numbers. However, the ESG backlash, and related proposed state legislation, are now receiving pushback for creating “unintended consequences.” And, while the debate is getting more heated in political and investment professional circles, over 76% of retirement plan participants still don’t even know what the acronym ESG means! This lack of understanding is only compounded by the inconsistent use of the terminology by the investment industry.
So, can we find any common ground between people operating on opposite sides of this debate? Apparently, yes. Financial materiality is a key area of agreement, as is the need for transparent disclosure that helps investors know what they’re putting their money into. That said, there’s (unsurprisingly) a lot of disagreement too, for example on divestment versus engagement, whether or not the fossil fuel industry is in decline, and whether stakeholder-focused capitalism improves or hurts returns.
Regardless of where you stand on the issues, we invite you to check out this discussion between Jeff, Anson Frericks, Co-Founder and President of Strive Asset Management, and Alex Wright-Gladstein, Founder and CEO of Sphere. You may know Strive given one of its co-founders, Vivek Ramaswamy, recently stepped down to run for the GOP nomination for President, while Sphere was founded to provide climate-friendly options for 401(k)s and also offers a tool called AtmoSphere, which identifies investments in fossil fuels in retirement plans.
We’d like to see more constructive conversations like these, as we believe they can help investors and their advisors better understand the ESG landscape and potentially reduce division. We’d love to hear what you think:
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