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Industry expert Jon Hale shares his views on attempts to discredit sustainable investing

Posted on August 14, 2018

Morningstar Sustainalytics
Morningstar Sustainalytics

In a new Medium article highly worth the read, Jon Hale, Global Head, Sustainable Investing Research at Morningstar, writes about recent misleading attacks on the credibility of ESG assessments and sustainable investing. He takes aim at a critical report from The American Council for Capital Formation, a Washington D.C. policy group financed by the National Association of Manufacturers, the fossil fuels industry and various other corporate lobbying organizations.

Jon shares his views on the motivations behind the ACCF’s report and its misinformed conflation of (known) flaws in ESG assessments and the overall validity of sustainable investing. He also counters criticisms of investment managers integrating ESG factors into their investment processes. Jon sets the record straight, pointing out that:

  • Large investment managers are engaging companies on ESG issues because they want to reduce risk and build long-term shareholder value;
  • Investors encouraging companies to look at their broader environmental, social and economic influence can both reduce long-term systemic risks and help create a context in which investments can flourish over the long run;
  • “Main street investors” support sustainable investing and sustainable investors are pressing these issues with companies because it is a path to long-term value creation and a more sustainable world;
  • When Morgan Stanley asked individual investors last year how interested they are in sustainable investing, 75% said they were either somewhat or very interested. And more than 70% agreed that having leading ESG practices can lead a company to higher profitability and make it a better long-term investment.

Read “Attacks on ESG from the Swamp” by Joh Hale.

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