Evangelical Christian, Robert Netzly, discusses the conflict between faith-based investing and ESG strategies. The podcast explores the criticism faced by ESG investing and the biases in the investment world. It debates neutrality in businesses and values, and explores the historical context and differences of socially responsible investing. It also delves into the influence of political beliefs on ESG approaches and the challenges faced by money managers balancing profit and social responsibility.
ESG investing faces challenges and criticisms from different perspectives, with opponents viewing it as a threat to traditional ways of doing business.
ESG investing has become increasingly politicized, facing backlash from conservatives who accuse it of imposing liberal values on financial markets.
Deep dives
Faith-based investing and the backlash to ESG
Robert Nettzley, the CEO of Inspire Investing, practices faith-based investing that aligns with his Christian beliefs. He excludes companies involved in abortion and LGBTQ rights from his portfolio while engaging with others to encourage change. However, his approach has faced criticism and contradictions, with conservatives attacking the broader ESG movement and some liberals calling for more action. The ESG movement itself is complex, with different interpretations and approaches. It aims to consider environmental, social, and governance factors in investment decisions. Critics argue that ESG can be seen as a form of virtue signaling or imposing progressive views on financial markets. Despite the controversy, ESG investing continues to evolve and influence the industry.
Navigating the challenges of ESG investing
ESG investing faces challenges and criticisms from different perspectives. While proponents argue it's about considering emerging risks and opportunities related to the environment and society, opponents see it as a threat to traditional ways of doing business. The lack of clear definitions and inconsistencies in ESG approaches contribute to the ongoing debate. Some believe there is a need for better data and analysis to predict which stocks will outperform others, while others stress the importance of understanding the economic impact of environmental and social factors. The size of the ESG universe is still relatively small but growing, and its future remains uncertain.
The controversy and politics surrounding ESG
ESG investing has become increasingly politicized, particularly in the United States. It has faced backlash from conservatives who view it as a progressive agenda, accusing it of imposing liberal values on financial markets. Some politicians and conservative commentators argue that ESG initiatives go against traditional capitalism. Meanwhile, companies and financial institutions find themselves navigating between different viewpoints as they balance profitability and aligning with ESG principles. The political polarization surrounding ESG has resulted in some companies toning down their rhetoric or avoiding discussions regarding climate change and diversity to avoid controversy.
The evolving landscape of ESG investing
The ESG investment landscape is in flux as it continues to adapt to changing circumstances. Some investors are concerned about greenwashing and the need for more transparency in regard to companies' environmental claims. In response, there is a push for alternative labels such as sustainable investing or de-risking. Despite the backlash and challenges, companies and banks remain committed to ESG initiatives, even if they are less vocal about it. While the future of ESG remains uncertain, its effects on investment strategies and decision-making are likely to continue.
Robert Netzly is an Evangelical Christian trying to realize his values and stay true to his own beliefs while working in investing – and he personifies a bigger war going on in the investment world and American politics over a little acronym called ESG. In the last year, there’s been a Republican backlash to the trillions of dollars committed to investing practices that take environmental, social, and governance concerns (such as climate change and gender inequalities) into account.
We first published this special episode last spring, based on reporting Bloomberg News' ESG reporter Saijel Kishan did for a fascinating piece called “What Would Jesus Buy: Investor Charts Course for $2 Billion Fund.” In this special episode, she shares more of that story, which is a tale of two conflicts, in a way. Should there be biases in the investing world, be it faith-based or social activism? And should ESG exist at all?