The death of ESG has been greatly exaggerated
From Callaway Climate Insights, we wish you a happy, healthy and abundant Thanksgiving. We'll be back on Nov. 27.
In today’s edition:
— While news outlets rush to declare ESG investing dead, a new wave of investment is already starting
— Which side of the great carbon divide are you on?
— The renewables revolution promises millions of new jobs most of us aren’t ready for
— New open trade tracker platform to boost global supply chain climate planning
— Ninety percent of European business leaders push more sustainable efforts by 2026
— Electric appliances are great, but don’t mess with our gas stoves, Americans say
I was having coffee at the New York Athletic Club yesterday while in town for Thanksgiving; grabbed a spare Wall Street Journal from the counter and there it was right on the front page below the fold.
“Social-investment craze fades, hurt by weak returns,” said the headline of a story declaring the end of the era of environmental, social and governance (ESG) funds.
The story cited third-quarter data about fund flows leaving sustainable investments after an admittedly horrible nine months for clean tech stocks. But it missed the recent rally these past few weeks sparked by a change in the outlook for interest rates, which sustainable investments are highly sensitive to. Some of the sustainable ETFs, left for dead by investors in October, have rebounded strongly in November and may be poised for a year-end rally.
The next story I read was a Reuters piece posted on LinkedIn about a friend of Callaway Climate Insights — Jonathan Maxwell of Sustainable Development Capital Ltd. in London — raising €125 million ($136.6 million) from the investment arm of the European Union to complete its new €650 million fund to invest in energy efficiency projects in Europe.
Indeed, the past few weeks as we approach COP28 in Dubai have been the best time for renewable investors in more than two years, and despite the headlines, money is still flowing. Maybe it won’t last but it’s certainly not dead. If anything, the WSJ article was just the sign of mainstream capitulation that savvy investors have been waiting for.
Another good investment idea . . .
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Carving up the great carbon divide might surprise you
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