Language reform needed for ESG to flourish
There is a real need to remove the language of “woke capitalism” from ESG investment, according to a panel, if there is to be progress in Australia.
Speaking at the Responsible Investment Association of Australasia (RIAA) investment conference, a panel discussed whether ESG was “woke or broke”.
Fiona Reynolds, an independent director, said: “Our economy should serve the needs of society, and if that’s ‘woke’, then so be it, but that’s something the industry really needs to reject.
“We need to not use that language that is deliberately being used by the enemies as really deceptive and political framing. We need to make sure we really push back against it and reject the notion of ‘woke capitalism’.
“We should always make sure when we are talking about these issues that we are framing it as a fiduciary responsibility; speak the language of investors and think about risks and opportunities and it’s role in long-term value creation.”
The panel discussed how this was becoming a big issue in the US, which focused more on individualism than the collective approach seen in Europe. This was particularly a problem for global companies headquartered in the US, which had to navigate meeting the needs of both sets of clients.
However, in Australia, Reynolds said the finance industry had welcomed the ESG nature of investments and that this was particularly reflected in the most recent budget from Treasurer Jim Chalmers. The interest of the government meant there was unlikely to be a backlash to ESG in the near term.
“[A backlash] won’t happen under this government, but it could happen. All of the financial services sector are on board regarding ESG and understand climate risk, so I’d say it is unlikely but not impossible.
“In less than a year, we’ve had more actions than in the last decade; there has been a deluge of things they are trying to deal with in terms of disclosure and greenwashing coming at them very quickly. We have a supportive government in terms of sustainable finance.”
She cautioned that while the government was supportive, it was important not to get caught up in politics.
“The investor issue is to not get caught up in politics and be careful about the language we use, [and] show that we are prepared to work with the government.”
Fellow panellist Professor Tim Lynch, professor of political science at the University of Melbourne, disagreed and felt that politics was a fundamental part of ESG.
“Don’t assume everyone will resonate in a political consensus; ESG is unavoidably political, and if you forget that, then you go nowhere.”
AUTHOR
Laura Dew
Recommended for you
T. Rowe Price believes Australian growth is successfully managing to shrug off consumer weakness, but the firm’s multi-asset team is not yet positive enough to increase its underweight position.
Iress has issued an update denying the validity of “certain statements” made by an alleged threat actor, following a cyber incident last weekend.
The latest budget papers have outlined a $10 million provision for ASIC greenwashing enforcement activity as well as funds for a sustainable labelling regime to be partially met by industry levies.
Betashares has expanded its fixed income solutions with the launch of a new ETF offering exposure to subordinated bonds issued by the big four Australian banks.
Looks like a duck, quacks like a duck: WOKE CAPITALISM!! You guys have been trying to ram this crap down advisers throats for long enough. Most see it for what it is, a politically motivated "climate" initiative and all the rent seeking managers jump at the chance to get their snouts into the trough. Sickening.
Add new comment