Are there any risks associated with ESG investing? What are they?
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Principal in Finance (non-banking)a year ago
Yes, while altruistic, ESG investing is not necessarily strategic. We often see companies pay lip service to good intentions, only to fail in their follow-through. In addition, ESG initiatives may be incongruent with a company's near-term positioning. Principal in Finance (non-banking)a year ago
Also if I was to caution somebody, it's the unforeseen dynamics that the company may not be yet familiar with when going into a new market or a new domain or a new philosophy. I think with the spotlighting of ESG, we need to be doing the right thing and get involved but recognize we have never done it before. There are probably all kinds of pitfalls that we don't know exist. Oftentimes companies throw money or throw people at something and just have no idea what they're getting themselves into.
IT Director in Educationa year ago
Yes there are various risks associated with ESG investing, the most significant one being asset devaluation in the long term.