Sunniva Kolostyak: Contrary to what you might think, greenwashing and a lack of standardisation are not ESG’s biggest problems.
Even more significant is the co-ordinated campaign of divestment being levelled against some of the world’s biggest asset managers by Republican-run US states.
Louisiana, South Carolina, Utah and Arkansas have all announced their intention to divest more than $1 billion from BlackRock. And there is clearly more of that to come. ESG also has very public detractors.
At a national level, prominent US Republicans like Mike Pence have publicly criticised “Liberal activist investors” and their efforts to divest from environmentally damaging projects.
It doesn’t take a huge mental leap to see the connection between that kind of politics, and the very real prospect that the Trump campaign will re-run for the presidency in 2024. In 2016, he ran on a pro-coal platform. Have the sands shifted in favour of an explicitly anti-ESG one? It would be an easy change.
In the UK, meanwhile, ESG is still often an institutional conversation. That’s not to say the public isn’t getting involved, but there’s a sense sometimes that ESG itself is still “owned” by marketing teams, rather than a truly activist investor base.
All that adds up to one big question. Who does own ESG? Is it big companies like BlackRock? Is it politicians? Is it marketing teams? It sometimes feels that way. Is it us? You would hope so, but it will take more than individual effort to solve ESG’s problems.
This week, we’re writing about all that and more. Welcome to ESG week. Follow Morningstar.co.uk to see the fruits of our efforts.
For Morningstar, I’m Sunniva Kolostyak.
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