Serena Mak, Green Finance Advisor of Friends of the Earth (HK)

As more and more investors and governments are recognizing the importance of ESG, we are seeing continuous increase of sustainable and green investments. For example, there were around 265-300bn USD of green bonds issuance in 2020 alone, and social bonds has also taken a serious foothold with over 730bn USD of issuance. The sustainable debt market has grew over 27 times (!) since 2013.

With the exponential growth and interest, different voices has started to emerge, and the effect of lack of ESG reporting standards is also taking its toll. Issuers are being accused of ‘green washing’ (unsubstantiated claim / false impression created for investors that a corporate’s products or services are environmentally friendly, or ‘green’), and even within the same institution we can see opposing views of ESG.

Earlier in 2020, Blackrock’s CEO has issued his annual ‘letter to the CEOs’, where climate change is named as one of the top priorities that he believed that CEOs need to be thinking about. And just a week or two ago, Blackrock’s former chief investment officer for Sustainable Investing has published an opinion piece in a newspaper where he claimed that sustainable investing is “…little more than marketing hype, PR spin and disingenuous promises from the investment community.” If even the investment officer responsible for sustainable investing is saying this is a marketing hype, how should the investment community / retail investors / general public think about it?

In my opinion, just like any new topic that emerges through the evolution of world views, there is meant to be different voices (think about how the topic of gender equality has evolved in the past century, as one example). However, the important part to keep in mind is that at least we have to start noticing and discussing these critical issues such as carbon emission and global warming, which is exactly what the sustainability investing trend is driving at right now.

Standards may take time and global consensus to develop, but one thing does not change – the earth is waiting for us to take prompt actions to save itself (and all lives and resources in it) and it needs to start now. Let’s keep a clear and balanced mind, to make right investment decisions for the environment, and not be derailed or discouraged by the opposing views.

References:

https://www.blackrock.com/corporate/investor-relations/larry-fink-ceo-letter

https://www.usatoday.com/story/opinion/2021/03/16/wall-street-esg-sustainable-investing-greenwashing-column/6948923002/

https://www.climatebonds.net/2021/01/record-2695bn-green-issuance-2020-late-surge-sees-pandemic-year-pip-2019-total-3bn


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