ESG Investing is ‘Totally Unstoppable’ UBS Chair Kelleher Says
The current challenges to ESG investing won’t stop investors’ focus on environmental, social and governance considerations, UBS Group AG chairman Colm Kelleher said at the Hong Kong Global Financial Leaders’ Investment Summit on Wednesday.
“This movement is totally unstoppable,” he said. “Our investors clearly are focused on this, so this is not going away. It’s what Generation X, Z, millennials, et cetera want.”
ESG investors have had a tough year. Tech stocks, a staple of ESG funds, have slumped. A boom in commodities, which ESG investors tend to stay away from, made these losses even worse. Regulators worldwide are clamping down on greenwashing, and in the US, finance firms embracing ESG strategies have been blacklisted by several Republican states.
Currently, ESG is “loosely defined” with “no real accountability as yet,” Kelleher said. “The sooner we get clarification, the better for all of us. We have already raised a significant amount of ESG funds. We have to make sure investors understand that these are correctly identified. You don’t fall foul of the greenwashing charges that have happened elsewhere.”
The industry wants “hard codification” from industry regulators like the US Securities and Exchange Commission and the Commodity Futures Trading Commission, he added.
“We know what ESG is,” he said. “What we’re waiting for as financial intermediaries is codification, the rigour and regulations that go around it, so we know what we’re reporting,” Kelleher said.