viernes, 27 de agosto de 2021

Are your ESG investments “sustainable grade”?

At the end of 2020 it was estimated that there were almost $38 trillion AUM with the ESG label, an increase of over 24% over 2018.  ESG assets are on track to grow globally to more than $53 trillion by 2025.

There has been explosive growth in the last few years, both in ESG investment (Socially Responsible Investment, SRI) in the securities of companies and in the sustainable finance of projects and activities through Green, Social and Sustainability (GSS) and Sustainability linked (SL) Bonds and Loans.  There a significant industry promoting both sides of the finance, that includes asset managers, assets owners, individual investors, issuers, brokers, financial institutions, information providers, rating agencies, assurance providers, sustainability reporting standards producers, consultants, regulators, national and international institutions, and NGOs among many others. Most of the participants in this industry have a financial interest of promoting its development and growth, and a few have an interest in their legitimacy and impact on sustainable economic development. There is competition within the first group for market share, and conflict of interest between the first group (growth and fees) and the second one (legitimacy and impact). Let’s call this the “ESG industry”.

This substantial growth is the result of two forces.............

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