ESG and Alpha: Sales or Substance?
On February 25, 2022 by Ken PuckerInstitutional Investor
By Andrew A. King and Kenneth P. Pucker
February 25, 2022
Managers of ESG investments create false hope, exaggerate outperformance, and contribute to the delay of long-past-due regulatory action.
In late 2018, while seated on the dais of The New York TimesDealBook Conference, BlackRock CEO Larry Fink declared that“demand for ESG [environmental, social, and governance] is going to transform all investing.” At the time, Fink’s assertion seemed bold. Today it looks prescient. Escalating social and environmental challenges and claims that ESG investing can deliver alpha (outsize market returns) and a more sustainable planet have prompted investors to divert more than $3 billion per day to ESG investment products. According to Bloomberg, ESG investment now represents approximately one third of all professionally managed assets.
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https://www.institutionalinvestor.com/article/b1wxqznltqnyzj/ESG-and-Alpha-Sales-or-Substance