As ESG integration gains prominence investors are discerning on greenwashing. While the popular ESG narrative has virtuous intentions in many cases it falls short as exposure to the highly priced FAANGS dominates the portfolio. Where can investors find the next emerging leaders that will benefit from the structural evolution of the economy in line with the SDGs?

Speaker:

Tim Crockford, Senior fund manager, Regnan

Moderator: Laurence Parker-Brown, Institutional content producer, Conexus Financial

Key Takeaways

  • ‘Greenwashing’ is a symptom of an investment industry moving in the right direction, but it’s up to investors to insist on more clarity and transparency from companies billing themselves as ‘sustainable’.
  • “It’s so easy for marketing departments to stick pictures of wind turbines and wind farms in presentations, so you’ve got to ignore the superficial stuff and really get into the nuts and bolts,” Tim Crockford, senior fund manager at Regnan, said during a discussion at the Fiduciary Investors Symposium.
  • Greenwashing is apparent when an organisation spends more time marketing themselves as environmentally sound, rather than actually minimising their environmental footprint.
  • “The risk with greenwashing is you throw fuel on the fire of cynicism that some investors have towards these strategies, when they discover nasty surprises when they get into the weeds and do their due diligence,” Crockford said.
  • One way to circumvent greenwashing is to directly target companies producing products or services that contribute to a low carbon future, rather than companies that are attempting to transition.
  • Crockford said the markets are maturing, and while it’s a steep learning curve, once companies and investors move up the curve, there is a broader understanding of what it means to be a sustainable investment or business.
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