Planet Money Two Indicators: The fight over ESG investing
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Dec 21, 2022 Larry Fink, CEO of BlackRock, champions the cause of ESG investing, sparking debates around its true impact. George Serafim from Harvard sheds light on the challenges of reliable sustainability metrics. They discuss the backlash against 'woke investing' from some politicians and the emergence of anti-woke funds. The conversation dives into the balance between profitability and responsible investing, questioning whether ESG is genuinely transformative or merely a pacifier for investors. Transparency in corporate practices and shifts in investor perspectives also take center stage.
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Tariq Fancy's ESG Journey
- Tariq Fancy, optimistic about changing the world through ESG investing, joined BlackRock in 2017.
- He was excited about the potential to influence companies given BlackRock's massive scale.
Larry Fink's Impact
- BlackRock CEO Larry Fink's 2018 letter emphasized companies' social purpose, impacting the finance world.
- This fueled ESG momentum but raised the issue of whose money BlackRock was managing.
Client Priorities vs. ESG Goals
- Clients prioritize returns, limiting BlackRock's ability to solely focus on ESG goals.
- The debate on whether ESG funds outperform non-ESG funds is ongoing, with mixed research results.