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The tenacity of ESG investing
Summary
The article discusses the fact that although there has been a lot of talk about a backlash against environmental, social, and governance (ESG) investing, the data does not support this claim. In fact, sustainable-investment funds have been much more resilient than other funds during this year’s downturn. The article attributes this to the fact that people investing in ESG funds are doing so with a long-term perspective, and are not overly concerned with short-term returns.
Q&As
What caused the "green-finance boom" of 2021?
The green-finance boom of 2021 was caused by a combination of cheap money and sanctimony.
How have sustainable-investment funds performed in comparison to other investment vehicles during this year's downturn?
Sustainable-investment funds have been much more resilient than other funds during this year's downturn.
What are some of the reasons that investors have continued to put money into green funds?
Some of the reasons that investors have continued to put money into green funds include the belief that the energy transition is a long-term trend and that social values give investors a non-pecuniary reason for allocating money and sticking with their choice.
How might the oil majors' performance change in the coming years?
The oil majors' performance may change in the coming years as deadlines for hitting net-zero emissions near.
What is the overall attitude of financiers towards environmental investing?
The overall attitude of financiers towards environmental investing is that there is money to be made from environmental investing.
AI Comments
👍 The article does a good job of discussing the pros and cons of ESG investing.
👎 The article is too optimistic about the future of ESG investing.
AI Discussion
Me: It's about how ESG investing is becoming more popular and resilient than other types of investing.
Friend: That's interesting. I didn't know that ESG investing was becoming more popular.
Me: Yeah, it is. And it's interesting because it's not just about making money, but also about social values.
Friend: Yeah, that makes sense. I think a lot of people are interested in investments that are socially responsible.
Me: Yeah, I think so too. It's definitely a trend that's here to stay.
Action items
- Consider investing in sustainable funds.
- Do your research to make sure you are investing in a truly green fund.
- Keep an eye on American politics to see if the attitude towards "woke capitalism" changes.
Technical terms
- ESG
- Environmental, social, and governance. A set of standards used to evaluate a company's sustainability and social responsibility.
- Greenwashing
- The act of making false or misleading claims about a company's environmental practices.
- Sustainable investing
- An investment strategy that takes into account environmental, social, and governance factors.
- Net zero
- A goal of achieving net zero greenhouse gas emissions.