The ESG Advocate 003 - Will the real ESG please stand up?
ESG means different things to different people and has strayed into various corporate approaches and investment strategies over the past few years.
Keep the concepts from our first podcast in your head as you read. Our perspective shapes how we view the world and our perspective on ESG.
We'll wrap with the newly announced ESG Exchange and our Tweet of the Week, covering a fascinating look into what it will take to power a climate change transition and the consequences.
Context: We live in our own realities
Trevor Noah: Who do you trust (when you don’t trust the news)? - Tools and Weapons with Brad Smith | Podcast on Spotify — open.spotify.com
I often think back to Brad Smith's book "Tools and Weapons," and was thrilled to see it become a podcast. The title phrasing flips the 'risks and opportunities' of ESG wonderfully.
This first episode sets the context for the theme this week: storytelling and perspective. As an English graduate, I can tell you, that there's a lot of power in words.
The Daily Show's Trevor Noah takes us through the intersection of the news of the day and technology's impact. The result is a bleak, black-and-white worldview that surrounds us in an individualized reality. It's only natural that from here, we look at the opposing realities of ESG.
Debate: Is ESG a distraction against climate action?
One of my favorite ways to learn is by listening to debates. Unfortunately, they are like a blue lobster (1 in 2 million). When we find one, we should pay attention because it affords us a chance to hear opposing views and learn.
The NY Times recently hosted a fascinating debate on whether or not ESG is a distraction against climate action. It is certainly an interesting question, as ESG is currently rife with various interpretations, from risk to sustainability, greenwashing, and politicization.
Here are some highlights 🔔🔨
Sophia Hamblin Wang opens the debate with a personal story about Australia's wildfires. At the same time, she tried to champion green cement technologies to global construction leaders, who saw it as a purely concessionary effort.
Ioannis Ioannou shows us that ESG can be a symptom but not the disease because we haven't done much with climate change, despite knowing about it for a long time.
Tariq Fancy, Blackrock's former head of Sustainable Investing, claimed that ESG is a market self-correcting theory in disguise with no real action. It's an argument he's made several times in the media over the past year or so. But, unfortunately, he lost me when he stated that everyone knows he should be debating Larry Fink about this.
Ultimately, Nicolette Bartlett from CDP was the debate's star, though. Throughout, she consistently calls out how ESG has been additive, including an example that we cannot ignore, the raiding of Deutsche Bank for greenwashing, which I covered in the first issue.
She concludes the debate with this powerful statement: "It (ESG) is an easy scapegoat for the systematic and chronic failure of our climate and governance institutions. However, it is not the reason we do not have climate action."
Politics is warping ESG
Grift Capitalism: The GOP’s Brilliant Strategy For Ripping Off Ordinary Americans — www-forbes-com.cdn.ampproject.org
While the left is blamed for weaponizing ESG for political purposes, far-right groups are the ones perpetrating the politicization. Yet, unfortunately, the very people whose interests they say they are serving are the ones who will be left alone to deal with climate change.
In this read, Robert Eccles walks us through Grift Capitalism, leaving no stone unturned, including the Sustainability Taliban, who focus on 'not good enough' efforts. From right to left, forces are pressing on ESG in unproductive ways.
If there is one straightforward reality in this read, it's not to be fooled by those crafting a new narrative: "Smart sustainable investing reduces risk, not the opposite."💯
Engagement is one way to drive real outcomes
James Rasteh Talks ESG Investing from the Shareholders’ Perspective - ESG Decoded Podcast | Podcast on Spotify — open.spotify.com
Lastly, in this episode, Amanda Hsieh talks with James Rasteh, the founder of Coast Capital, an investment management firm with an engaged approach to investing in public companies. I'd consider Rasteh as someone who is living the reality of ESG through his investment strategy, taking a Private Equity engagement approach to Hedge Fund management.
Whether it's engagement or stewardship, I'm a fan of this approach because I want to see companies manage their risk and drive improvements. This is how ESG can lead to real impact, whether it's risk management or sustainability. Outcomes are what drive facts that can break down the walls of various realities.
There's a story in the middle here about a proposed project through the Amazon rainforest. It didn't end up going through due to the mountain of evidence and financial hardships. This was a good, real outcome for us all.
A new global knowledge exchange for ESG
On June 28, the Good Governance Academy launched the ESG Exchange. This "provides accessible expertise through global collaboration" as companies look to upskill their employees on new ESG reporting requirements.
The kickoff video covered several interesting topics. As an ESG standards nerd, I enjoyed hearing about the consolidation of sustainability standards over the past few years, an effort which the Founding Patron, Professor Mervyn King, was very close to.
Overall, I'm curious to see how this knowledge exchange supports ESG credentialing and how much participation they will get globally. They seem to support 'credits' less by webinars that run in the background on mute but more with community participation. As the host mentions at the start, many people were in attendance, indicating how hungry people are for this type of effort.
🔥Tweet of the Week🔥
Phew! There was a lot going on this week. Out of everything though, this tweet caught my eye.
As we look to electrify everything in the hopes that we can move electricity to renewables, copper and lithium will play a significant role in the distribution and storage of that energy.
Our TOTW comes from Ed Conway, who shows us where this cooper comes from, its importance, and the complexity of moving us to green energy. Make sure to watch the video in the thread!
