Sustainability is at Risk when Asset Managers are the Judge, Jury and Executors of the ESG Agenda
What makes a sustainable investment truly sustainable? And who gets to decide?-
"I’ll detail a bit below how the structures of asset allocation and private equity make many impact claims suspect. More and more managers, of course, are delivering sustainable investment results. But allowing the managers to not only monitor, but to define ESG and responsible business practices, risks discrediting sustainable investing, notwithstanding the obvious client demand for and public benefit of bona fide projects."
"An irony of asset management is that the largest pool of capital – the allocators – are not the best resourced. It is the fund managers, especially the very large fund managers, and banks that are willing to pay. Especially if that payout is in the name of asset gathering, or developing products for which the manager can charge a higher fee. Fee-sensitive asset allocators, unlikely to spend much on their own ESG research and diligence, leave it to the managers, even if they ultimately cover the cost."