I have to admit to knowing little about ESG and less about the multitude of initiatives that fund managers and pension schemes sign up to, to help them manage their investment in a socially responsible way.
But I expect that by now, with five years of TCFD under our belts, we could have worked out what we own.
I was surprised to read this by Brooke Masters in the FT.
Brown University is not alone.
Calstrs has opened up to an issue with net zero data integrity, and taken steps to address this. Will other pension funds, using the same methodology to “guesstimate” their carbon footprint, follow suit? https://t.co/STSx2zHZEz
— Josephine Cumbo (@JosephineCumbo) April 28, 2024
Calstrs and Brown and the managers they employ (Blackstone for instance) are not short of a few bob.
One university executive told the FT’s Brook Masters last week that when they asked for a full accounting of their institution’s exposure to defence stocks and companies that do business in Israel, they were told it was too hard to calculate quickly.
Brown say they are under a non-disclosure agreement with some managers and cannot divulge what they are invested in (presumably to keep the manager’s IP safe).
This is surely wrong. We employ fund managers to make us money in the right way, if they will not tell us how they go about that how can they be accountable for making our money matter?
We are told that artificial intelligence can tell us anything. So why can’t it tell me the information I want to know about the management of my pension fund?
This seems one of those cases when the consumer’s common sense calls out the madness of a market that is up itself.
Whether it’s over Gaza or the Ukraine, over fossil fuels or human rights, investors have the right to know what they are investing in and to demand divestment where there is a moral and commercial imperative to do so.
There is an interesting discussion on this subject between Nico Aspinall and Sally Bridgeland on this week’s VFM podcast (#61)
I cannot follow the technical argument but I know what I want from my money and it’s not investment in stocks and bonds that cause human misery through bad environmental, social strategies and tolerate poor governance at any level.
Value for my money and stewardship
I pay people to manage my money and would pay them more to do their job and spot when a company is cheating. I would be interested in how my fund managers are dealing with this (until I remember I am invested in a fossil fuel free fund). Which of course is the problem with divestment and one I am aware of,
I worry too for the latest craze in “synthetic equities” – which I note Smart are about to invest in. Do those who hold an option on a stock, have any control on the managers of that stock? I at least have the satisfaction of knowing I don’t own or profit from Shell selling phantom carbon credits, I would feel deeply unhappy to profit from Shell while my managers had swapped stewardship rights for lower fees.
Being unable to exercise governance is a governance failure . We can have little sympathy for institutions who blame the NDAs they sign for our ignorance.
