The idea of incorporating gross national happiness into mainstream economic thought has long been a subject reserved for debating societies and 'lefty' thinkers. As politicians are cornered into taking immediate action on climate change, capitalism is in for a big surprise.
The spotlight is on publishers of ESG ratings with a recent damning critique coming from a prominent academic claiming their model should be ripped up. But laying the blame solely on rating agencies gives asset owners a free pass they don’t deserve.
In their new book, Moving Beyond Modern Portfolio Theory – Investing That Matters, Jon Lukomnik and James Hawley deliver a devastating blow to adherents of MPT. The two deftly articulate why it is not fit for purpose to tackle the challenges we face today.
The development of new ways to apply sustainable capital is truly exciting, but investors must pay close attention to how new fund offerings are created and the ESG data on which they are predicated.
The proliferation of ESG indices and the funds launched off the back of them is great business, but the ESG ratings underpinning them are under intense scrutiny.
In his new book, the former central banker aims his observations on the climate crisis at the people with the power and money to make a difference. Can we expect them to listen?