News
The Importance of Finding Your Purpose
Peter Diamandis presents a compelling framework for finding your purpose that will propel your mission forward. What is your MTP (Massively Transformative Purpose)?
ESG Insider Questions the ESG Path
I enjoy reading Tariq Fancy's thoughts on ESG. His writing presents an insider view that is part academic and part storytelling. His pessimism is sobering. My evolving take on ESG is:
1) While flawed, and we definitely need better metrics and reporting, getting corporates to be conscious about ESG is ultimately a good thing.
2) Because large corporates are the biggest offenders of environmental and social sins, they are also the ones with the largest potential to reverse their sins, so action is critical.
3) I agree with Tariq that we must have more government intervention and stricter governance of environmental and scoial issues.
4) Just like building a structure to be stormproof is more prudent than fixing the structure after the inevitable storm, building companies to be ESG-oriented from day 1 is easier than retrofitting ESG principles after a company scales. I'm really excited by an emerging class of startups that are both mission-driven and attentive to ESG principles from the beginning.
The World May Be Better Off Without ESG Investing
This provocative opinion piece in Stanford Social Innovation Review states: “The bar for what constitutes a good corporate citizen is abysmally low and may have made ESG investing, arguably the hottest trend in investing today, a greater force for destabilizing society and the planet than if it didn’t exist at all.“ Well worth the read.
My quick take:
1) No, I don’t think that ESG investing is a greater force for destabilizing the world than if it didn’t exist at all.
2) Yes, ESG investing and ESG ratings agencies and systems are fraught with problems that need to be addressed.
3) Yes, I worry about an impending backlash on the ESG investment industry as greenwashing claims and the realization that a high ESG rating does not necessarily connote a “socially good” company will be increasingly illuminated.
4) Even with ESG ratings and accompanying ESG funds, a truly concerned investor must do his/her own due diligence on investments to align the investments with his/her personal values.
I will be posting and writing more in the coming months about the emerging pros and cons of ESG investing and other forms of socially responsible investing.
Corporate Climate Efforts Lack Impact, Say Former Sustainability Executives
Inside the booming world of sustainability, a small but growing cohort of disillusioned veterans are speaking out against efforts by corporations and investors to address an overheating planet, income inequality and other big societal problems.
Driving Impact is Not Only for “Impact” Businesses
The insurtech company Lemonade proves once again that using business to make the world a better place is not reserved only for businesses directly addressing major social or environmental challenges. Any business can improve the lives of its stakeholders. See this graphic of the Lemonade community’s impact through over $2.3M of giving to 65 charities.
The future of fashion: Sustainable brands and ‘circular’ business models
There’s no denying that the fashion industry has been a major contributor to climate change and biodiversity loss—which means the industry’s sustainability efforts are critical to our planet’s health. In this edition, The Next Normal explores the coming decade in sustainable fashion.
A Stunning Example of Stakeholder Attentiveness
Articulate recently made news as a 20-year old bootstrapped company taking in their first outside investment, a whopping $1.5B at a $3.75B valuation. Impressive. More impressive is how this SAAS training and development platform demonstrates that companies in any industry can improve the world via sensibilities to the environment and to human stakeholders. Articulate’s Human-Centered Organization Framework(TM) is stunning and is certainly a motivating force in their ability to recruit, retain and maximize the potential of elite talent.
JPMorgan to buy ESG-focused fintech startup OpenInvest
"Clients are increasingly focused on understanding the impact of their ESG portfolios and using that information to make investment decisions that better align with their goals," J.P. Morgan Asset & Wealth Management CEO Mary Callahan said.
The deal comes as the pandemic has also caused a surge in interest in companies that perform well on ESG targets such as lowering climate emissions or encouraging more diverse workforces.
The Activist Investor That Beat Exxon Is Trying To Reinvent The Index Fund
Engine No. 1, the small activist investment firm that won a total of three seats on ExxonMobil’s board of directors earlier this month, is launching an exchange traded fund that aims to reshape the index fund.
Its Engine No. 1 Transform 500 ETF will mimic a broad market index fund at a low cost, while also giving investors a potentially powerful say in corporate governance. At an expense ratio of just five basis points annually, or 0.05%, Engine No. 1 will provide active corporate governance oversight on the constituent companies held in the ETF by a team of investors that just scored one the biggest proxy battle wins ever witnessed in Corporate America.
How Exxon Lost a Board Battle With a Small Hedge Fund
Early this year, leaders of Exxon Mobil, the vast oil company descended from the Standard Oil empire, found themselves in an unusual situation: defending the oil giant against a tiny activist investor calling for a major shake-up in the name of climate change. Even more unusually, they were on the back foot.
Overselling Sustainability Reporting
For two decades progressive thinkers have argued that a more sustainable form of capitalism would arise if companies regularly measured and reported on their environmental, social, and governance (ESG) performance. But although such reporting has become widespread, and some firms are deriving benefits from it, environmental damage and social inequality are still growing.
This article, by Timberland’s former COO, outlines the problems with both sustainability reporting and sustainable investing. The author discusses nonstandard metrics, insufficient auditing, unreliable ESG ratings, and more. But real progress, he says, requires not just better measurement and reporting practices but also changes in regulations, investment incentives, and mindsets.
Capitalism Is Ripe for a Change, and Impact Investing Is the Way to Do It
Sir Ronald Cohen is proud of a long career as one of the most influential investors globally in the past few decades. He is no less proud of his children who work in business but in the way Cohen believes is the future of business – impact investing and technology.
Impact investing aims to generate a measurable, beneficial social or environmental impact alongside a financial return. Cohen’s daughter Tamara is a co-founder of the startup Riseup that helps families balance their budget and his son Jonny works at the family’s investment fund.