Companies caught between Larry and Greta
Under the headline “Between Larry and Greta”, Spiegel editors Tim Bartz, Dinah Deckstein, Martin Hesse, Nils Klawitter and Gerald Traufetter shed light on the conflicting goals surrounding ESG. Mike Diegelmann is quoted with his view as well.
Like a hot potato, the various players are shifting responsibility on to each other. The problem: on the one hand, Blackrock – the largest provider of index funds – no longer wants to provide environmental sinners with capital. On the other hand, index funds inevitably have to invest in companies that are not very sustainable. If environmental polluters are included in the indices, there is no way around them. Blackrock boss Larry Fink therefore calls on index constructors such as MSCI to remove polluters from indices. The Cologne-based asset manager Bert Flossbach doubts that this alone will redirect the money to the socially and ecologically best managed companies. Flossbach concludes that the best way politics can combat climate change is by pricing CO2 emissions more effectively. But out of fear of protests, politicians are instead blaming the financial sector which in their view should steer capital in the desired direction. In this hotchpotch of conflicting messages, companies are caught between a rock and a hard place. Siemens, Total and Daimler are recent prominent examples.
Many companies are apparently caught on the wrong foot. cometis’ director Mike Diegelmann is quoted saying “Companies are ill-prepared for campaigns by environmentalists.” It is therefore imperative to “recognise reputation damage more quickly and to react faster.”
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