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"It's leading to cynicism," says Terrence Keeley. That's the gist of his new book, Sustainable: Moving Beyond ESG to Impact Investing, in which the former BlackRock executive calls for institutional investors, including pension funds, endowments, and foundations, to move away from what he calls the "ESG industrial complex" and toward direct impact investing.
Instead, Keeley says, investors should focus on waste reduction, affordable housing, health care, renewable energy, and education, the Wall Street Journal reports.
"The understanding people have when they buy an ESG product is that it will perform at or in excess of the market, while simultaneously doing some kind of good," Keeeley says.
"And to the extent you want to have a positive impact on the environment, that means investing, not divesting."
ESG, he says, is "not living up to its promise."
For example, MSCI's ESG indexes have underperformed the broader indexes over the past five years, he says, and those funds invest only in companies in accordance with the Paris 2050 objective, like Amazon or Google.
"These are all genuine concerns," Keeeley says, "but the way we're going about it, combining those and building alpha-based products is senseless."
Selected Grant News Headlines
A customized collection of grant news from foundations and the federal government from around the Web.
When Balazs Bognar moved to Tokyo from Urbana, Ill., at age 17, he had no idea he'd end up living there for the rest of his life. "He would take me and my mom and my brothers to cities around the...more
Alber Elbaz's fashion brand, AZ Factory, is shutting down, but not in a bad way. Instead, it's launching a new educational program called AZ Academy: Business for Designers, reports Women's Wear...more
Foundation: Central Valley Community Foundation
California's Central Valley is home to 25% of the US' fruits and nuts, and the state's agriculture-heavy San Joaquin Valley alone accounts for 19% of revenue and 14% of gross domestic product, per a...more
Michigan has given the green light to what could be the biggest development in the state's history. The state's Strategic Fund board has approved a $250 million grant to help develop 1,000 acres...more
Swiss Re is putting its money where its mouth is in Southeast Asia. The insurance giant is launching its Shine social entrepreneurship program in Indonesia, Malaysia, Singapore, and Thailand,...more
Foundation: Barberton Community Foundation
Kenneth Cox was running for mayor of Barberton, Ohio, in 2023, and when he saw a negative Facebook post about him, he decided to do something about it. "The residents of Barberton need a...more
"I am overjoyed with the success of Elevate District 5," says Miami-Dade County Commissioner Eileen Higgins, who's spent the past two years helping more than 500 small businesses in her district get...more
"Mental illness is something that every jail in the state of Alabama deals with," Calhoun County Sheriff Matthew Wade tells the Calhoun Journal. "Resources are not there to properly take care of...more
There's a whole new industry emerging in women's health, or FemTech, and it's all about women's reproductive health. Companies are developing devices and apps that help women better understand...more
Foundation: Surdna Foundation, Ford Foundation, Wallace Foundation, Wallace Foundation, Wallace Foundation, Wallace Foundation
The Ford Foundation has donated $116 million to support artists and arts organizations of color in the US, the New York Times reports. That's more than double the $50 million the foundation...more
Social Entrepreneurship
Spotlight
Gates Foundation Pledges $50 Million to Fight Ebola Epidemic
The Bill & Melinda Gates Foundation has pledged $50 million to support emergency efforts to contain the threat caused by Ebola in West Africa.
