As markets turn south, woke capitalism loses its shine
Matthew Lynn at the Telegraph analyses the sudden and welcome shift of the world’s biggest fund managers, who are suddenly walking back their recent political tilt.
“BlackRock, the world’s largest asset manager, has just announced that it won’t expect the companies it invests in to meet so many environmental goals. Sweden’s SEB said recently it would lift its blanket ban on defence companies. And Barclays has said – shock horror – that it is willing to back oil and gas exploration once again. One by one, major asset managers are revisiting their fashionable pursuit of ESG…“
BlackRock holds staggering sway in the financial world, with a significant shareholding in most of the world’s major businesses, so its change of direction really matters. As Lynn says:
“Beyond a few simple rules such as refusing to invest in companies that break the law, or allow corruption, the asset managers should drop the politics. It is not their area of expertise, and they are not very good at it. They are making mistake after mistake. Instead, they should get back to simply investing in firms that make a decent product, at a fair price, pay their staff and suppliers on time, and earn a good return for their shareholders.“