Political Pressure is Derailing Positive Efforts on ESG Investments: Nigel Green

Political pressure has been derailing positive efforts on environmental, social and governance (ESG) investments, warns Nigel Green, CEO, deVere Group.
 
deVere Group is among the leading global financial advisory, asset management and fintech organisations. 
 
The warning comes as it is revealed that the world’s second-largest global asset manager is resigning from the Net Zero Asset Managers initiative, whose members are committed to achieving net zero carbon emissions by 2050.
 
“Republicans in the US appear to be stepping up their attacks on financial institutions that they say are hostile to fossil fuels,” he added. 
 
“There can be no doubt that Republican states like Texas, Florida, Louisiana and South Carolina have ESG investing in their sights,” Green further said.
 
“Florida governor, Ron DeSantis is helping to lead the charge, supporting a recent resolution by the Florida State Board of Administration claiming the state would not back “ideological” investing,” he further commented.
 
“In Louisiana, the state treasurer has confirmed it’s pulling $800 million from funds that some have deemed to be pushing a more ‘woke’ agenda,” Green added. 
 
“Against this background, it can be reasonably assumed that heightening political pressure is responsible for a growing number of financial firms stepping away from their own commitments and from offering ESG investing to their clients,” the deVere CEO warned.
 
He further said that “the ESG backlash is here. But it is misguided. We need to get back to the fundamentals.” 
 
“A failure to know a company’s impact on the environment and on society is a failure to understand the impact on long-term returns to investors. ESG frameworks give intelligence about where the key shifts and trends are taking place now and in the future, and how disruptive they could turn out to be. This then fuels business, development and innovation activities which are likely to present major opportunities for investors because it provides intelligence on factors which will cause changes in markets,” he clarifies.
 
Those companies that take their ESG obligations seriously are the ones that demonstrably outperform – and this, therefore, is clearly beneficial for clients of financial institutions.
 
“It’s clear that companies with strong ESG credentials compete better with their peers in terms of related technology, innovation and regulation. In addition, they are more successful at recruiting and retaining top talent,” said Nigel Green.
 
While scrutiny is welcome, financial companies must not “bow to political pressure” regarding their own commitments, or by reducing their ESG offerings to clients, he added.
 
“It’s regrettable that some within the global finance community appear to be stepping away from their roles in addressing the climate crisis. I suspect they are positioning themselves on the wrong side of history,” he concluded.