Is ESG taking away our choices?
ESG stands for Environmental Social Governance and has been around for a long time but only recently has it really gained traction and we are all becoming aware of it.
As you probably know from my newsletters and by talking to me, I am becoming what my mum describes as an eco-warrior (see more evidence in the green box in this newsletter). We have just ordered a green house for our garden and my daughter was told that she wasnât getting any plastic crap for Christmas, but are some people going too far and taking away our choices?
As my clients are aware, I have changed our investment philosophy to be 20% invested in ESG funds (sometimes I call them ethical) so that we can all do our bit for the planet and polish our halos đ. Some of you have changed to 100% ethical and I am personally invested 50%, though questioning why I am not yet 100% too.
If you think how much money is invested in your pensions and investments and how much money is then invested in each of the funds that you invest in, that is a massive voice to be able to tell the individual companies that we are not happy with how they are working, how they are treating the environment and their staff and that we want change. That voice is huge and many people are already using it to make companies better.
EQ Investors, who run ESG portfolios, are launching a new fund this year just based on climate change. They will have a portion in companies that produce solutions to the climate crisis, but they will also have a portion that is invested in companies that they want to change. By investing in them they have a voice at the board table to ask them to change and apply pressure to make sure that they do. Your money could be helping them to do this.
By investing in ESG funds we are making a difference
Unilever are currently under fire from many of their share holders / investors as they are not doing enough to meet ESG targets when it comes to healthy food. Only 17% of Unileverâs products are from healthy food, compared with other companies such as Danone 61%, Nestle 43% and even Kellogg at 26% (because theyâre grrrrrrrrrreat!). Therefore some fund managers and Greater Manchester Pension Scheme have got together with some individuals and have told Unilever that they need to change.
Great idea and great use of their collective investment voice. Many more people are overweight and suffering from type 2 diabetes than ever before and something needs to be done.
However, Unilever make Hellmans Mayonnaise and Ben & Jerrys Ice Cream â both of which I love. I know that many of you will have seen me with my daily can of coke, which I am drinking now as I type, which now has a sugar tax on it as it isnât diet. Should my choices be taken away from me? Should I be penalised for the foods that I love and enjoy when I live a healthy life in most other aspects? At what point are we becoming a nanny state that imposes their views on us and makes us all do as they tell us? Controversial I know, but what do you think?
