August 10, 2022
Greenbiz recently published an article featuring interviews with Andrew King, Questrom Professor of Management and Professor of Strategy & Innovation, and Kenneth Pucker, Lecturer at Tufts University’s Fletcher School, on the efficacy of “ESG” (Environmental, Social, Governance) investing.
ESG investing has experienced exponential growth in the last few years, with many supporters claiming it to be a smarter and more moral way to fund companies. While ESG investing provides useful tools for ethical allocation of capital, Ken and Andrew argue that it’s not as effective as often described. One of the major criticisms of ESG investing is the way it’s being portrayed to investors. Andrew added that, “Changing the narrative will require a lot of hard truth-telling. Scholars will need to be clear and accurate about what ESG can and cannot do.”
The interview examines the reality of ESG investing for both casual observers and researchers, pointing out the limits of this methodology in terms of achieving real change.