Is Sustainable Investing Dead?
Once upon a time, companies were singing the praises of sustainability. Now the tune has changed, but the problems are still there. And so are smart investors.
The Trump Administration’s denial of climate change and the pending repeal of legislation in the US requiring companies to disclose their climate-related risks is… well… a kind of climate change itself: a change in the business climate. And the mood change impacts not only US firms but also international companies doing business with US firms or operating in the US. It is having an effect across Europe, too, where the energy crisis and economic woes make it harder for companies to remain virtuous and easier to fall off the climate bandwagon.
Projects supporting Environment, Social, and Governance (ESG) strategies have gone from something to boast about to something to hide.
“Greenwashing” – a derogatory term for companies that over-stated their ESG policies – has been replaced by “Greenhushing” – referring to companies that still incorporate ESG policies but downplay them.
The lofty goals of the 2015 Paris Climate Accord, (in force in November 2016), signed by 195 countries and international organizations, agreed to cut greenhouse gas emissions by at least 55 percent by 2030, reach climate neutrality by 2050, and keep temperature increases “well below” two percent a year. Today that goal seems out of reach, but not everyone has given up.
Despite the policy pullback from Washington, sustainable investing continues, particularly in hard-to-decarbonize sectors such as real estate and aviation fuel. In this special report, we speak with investors and analysts to see what’s being done and how investments are paying off.
(Editor’s note: The information contained in this article and accompanying videos is for educational purposes only. It is not meant to be construed as investment advice.)
