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ESG: Trillions Squandered and Zero Progress

The envisioned benefits of ESG investing—owning companies that follow responsible environmental, social, and governance policies—have failed to materialize. Instead, the blind acceptance of ESG precepts has resulted in trillions of dollars being misallocated and zero progress toward its principle target: climate change.

Terrence Keeley, author of Sustainable: Moving Beyond ESG to Impact Investing, shows how ESG got the ideology right and the methodology wrong. So far, socially responsible investing hasn’t changed anything while handing investors subpar returns.

In this interview, Terry and I discuss:

- ESG will not be enough. We need economic growth that benefits more people and is sustainable.

- Why we must invest in “dirty” firms if we want to make them greener.

- How to achieve the “double bottom line.”

- Why the ESG mindset is not the way to generate alpha.

- The “Doing good and doing well” approach must include solving energy poverty—which requires nuclear energy.

- The need to better measure the impact (or lack thereof) of ESG funds.

- Why climate change requires collective action on a global scale.

- The 5 things needed for ESG to work.

You can learn more about Terry and his work at 1PointSix LLC by visiting his website here:

You can get Terry's book, Sustainable: Moving Beyond ESG to Impact Investing here:

Stay informed on the big trends by subscribing to Global Macro Update here:

Time stamps:

0:24 What’s wrong with ESG

2:57 Trillions squandered and no results

4:10 Was ESG a fee grab by Wall Street?

6:11 Subpar returns with ESG

8:05 We can do well and do good

11:30 Invest your conscience and get a return

16:10 Free markets and capital allocation

19:56 We’ll get the world we deserve

23:40 Need better measurement of ESG funds

30:00 Every institution needs goals and guidelines

31:30 Climate change requires collective action

33:00 The 5 things needed for ESG to work
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John Mauldin
Each week, investors and financial professionals around the globe turn to John Mauldin to better understand Wall Street, global markets, and the drivers of the world economy. And for good reason. John is a noted financial expert, a New York Times best-selling author, a pioneering online commentator, and the publisher of one of the first publications to provide investors with free, unbiased information and guidance—Thoughts from the Frontline—one of the most widely read investment newsletters in the world.
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