The truth about ESG and sustainable investment

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ESG Investing Is Consistent With Fiduciary Duty

No matter your investment strategy, timely access to accurate and comprehensive information is critical. Transparency enables investors to make informed decisions with a greater understanding of the risks and opportunities facing a company. Yet incredibly, some American politicians are now trying to pass laws to prevent investors from taking highly relevant information into account.

Why? Is the information they seek to ban inconvenient?

We co-founded Generation Investment Management with five other partners nearly 19 years ago as a pure-play sustainable-investment manager. We agree with much of the recent criticism of the way some investors have claimed to use environmental, social and governance factors. We are unsurprised by the recent backlash against the multiple definitions and confusing terminology, the overreliance on checklists, the potentially misleading marketing campaigns, and the frequent lack of rigor and accountability. But these criticisms are by no means evidence that sustainable investing and ESG are failed concepts. Instead, they are welcome challenges to ensure that sustainable investing and the incorporation of ESG factors are carefully defined, clearly understood and effectively practiced.

Read more from the Wall Street Journal.

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