ESG Failure

This week, Consuelo Mack of PBS's WeathTrack program elected to do the segment on the downside of ESG, the investment alternative for those who are interested in promoting social concerns. And though it is always a good thing to get a different perspective on things, I do think it's entirely premature to be declaring a death knell on this relatively new option.  Just like Apple and Microsoft were considered hugely risky in the 1980s, today's ESG companies may well be the Amazons of the future. Still, for your consideration ... 

August 18, 2023

Dear WEALTHTRACK Subscriber, 

It’s the final week of the summer fundraising season for Public Television, so we are revisiting a recent popular and still timely interview with former BlackRock executive Terrence Keeley.      

It is very unusual for a top executive at a major investment firm to go public about a major policy difference. This week’s guest did just that. 

The policy is ESG investing, which as regular WEALTHTRACK viewers know stands for environmental, social and governance issues - the premise being that companies that follow policies to improve the environment, society and their governance practices will both perform better in the stock market and have positive results in all three areas.

BlackRock’s influential Co-Founder and CEO, Larry Fink, has been a major proponent of ESG investing. In his widely read annual letters to CEOs he has exhorted the leaders of the thousands of publicly traded companies represented in his firm's indexes to adopt ESG standards and report on them in detail.  

Terrence Keeley is CEO and Chief Investment Officer of 1PointSix LLC, an advisory firm he founded to “help institutional and high net worth investors optimize the amount of impact in their investment portfolios.”  He left BlackRock in July of 2022 to publish his increasingly influential book, SUSTAINABLE: Moving Beyond ESG to Impact Investing. Larry Fink wrote the book’s forward.

When Keeley left BlackRock he was a senior advisor overseeing relationships with central banks, sovereign wealth funds, endowments, foundations and other important institutions. Among his many accomplishments, he was selected as a “Global Knowledge Broker” by CIO Magazine.

Keeley told me in his 40-year investment career he has never advised a client to invest in ESG. In this week’s episode he explains why ESG investing doesn’t work and what does.

If you miss the show on public television, you can watch it on our website over the weekend, along with our past programs and our guests’ One Investment recommendations.  You can also find the WEALTHTRACK podcast on Stitcher and SoundCloud as well as iTunes and Spotify.

Have a lovely weekend and make the week ahead a healthy, profitable and productive one!

Best regards,

Consuelo