Former BlackRock senior adviser expresses concerns with ESG (2022)
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Over the weekend, The Wall Street Journal published Angel Au-Yeung’s review of the new book “Sustainable: Moving Beyond ESG to Impact Investing” by Terrence Keeley. A former BlackRock senior adviser, Keely wrote the book to express his concerns with the ESG investing model. Last year, Tariq Fancy, the former director of sustainable investing for BlackRock made headlines when he argued that ESG was a marketing tactic that had little or no impact on corporate sustainability or the environment. From the review:
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Terrence Keeley had been at BlackRock Inc. for about a decade when he reached a contrarian conclusion: ESG doesn’t work. Mr. Keeley spent much of his time at the asset manager overseeing a group that nurtured relationships with central banks, finance ministries, family offices and sovereign-wealth funds. Under pressure from politicians and activists, some of these investors were looking to distance themselves from companies that fall short on environmental, social and governance factors. BlackRock obliged, helping clients funnel money toward companies whose values they share. Mr. Keeley said the strategy has proved to be neither a reliable generator of returns nor a real catalyst for change. In his new book, “Sustainable: Moving Beyond ESG to Impact Investing,” he argues that investors should shift money away from ESG indexes toward “companies with persistent environmental and social problems and engaging them to change.”… Mr. Keeley retired from BlackRock in July, and the asset manager isn’t likely to abandon the ESG model soon. Still, the book hints at a quiet debate within a firm that has embraced the sustainable-investing movement. And it comes as the world’s largest investor is taking heat from government officials on both sides of the climate debate—for doing too much to discourage investment in fossil-fuel companies and for not doing enough…. Mr. Keeley isn’t the first former BlackRock executive to break with the company on the merits of ESG investing. The promise of ESG “lured me to join BlackRock to begin with,” Tariq Fancy, the firm’s former chief investment officer for sustainable investing, wrote in an August 2021 post on Medium. Mr. Fancy left BlackRock in 2019 convinced that the asset-management industry’s ESG push was “leading the world into a dangerous mirage, an oasis in the middle of the desert that is burning valuable time.” Mr. Fancy has said governments, not investors, must take the lead on climate change. Mr. Keeley believes the markets will play a major role—just not the way they are now.[1] |
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See also
- Environmental, social, and corporate governance (ESG)
- Economy and Society: Ballotpedia's ESG newsletter
External links
Footnotes
- ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
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