August 1, 2022
Harvard Business Review recently published an article coauthored by Andrew King, Questrom Professor of Management and Professor, Strategy & Innovation, addressing the historic surge in popularity of ESG investments and their impact on major societal problems.
Many individuals, institutional investors, and even portfolio managers are confused by the contradictory claims of ESG investments depicted in marketing materials. The authors argue that acknowledging and clarifying all of ESG investing’s shortcomings will help pivot to more productive and urgent endeavors.
“Though ESG investing is oversold, it is not the ‘devil incarnate.’ The addition of ESG fundamentals to traditional investing might someday allow investors to better predict returns and risks, but it will not save the planet.”
Andrew King
Questrom Professor of Management, Strategy & Innovation
Using evidence-backed observations, Andrew and his coauthor argue that ESG investing won’t address our generation’s urgent environmental and social challenges, and offer alternative recommendations, stating that, “none of these recommendations are straightforward. None will occur absent concerted civic engagement, global coordination, and a redistribution of power. At the same time, none rely on convenient confusion to oversell market based voluntary solutions.”