The ESG landscape is evolving rapidly, with assets committed to ESG-related goals poised to reshape the global financial landscape. Assets committed to Environmental, Social, and Governance (ESG) related goals are predicted to hit one-third of all global assets under management by 2025. Among the most popular themes in the ESG space is sustainable (aka, “green”) investing—an approach that is commonly implemented by providing more capital for companies with low carbon emissions and withholding capital from high-emission firms. In this talk, Professor Kelly Shue discusses why the dominant sustainable investing strategy may be counterproductive, because it pushes high-emissions firms toward short-termism. Professor Shue also discusses the problems of insufficient industry adjustment, greenwashing, and how ESG investors focus on misleading metrics of progress.
