Asset Mgr calls Goldman Sachs' ESG approach "lazy."
Goldman Sachs Group Inc.
Luke Barrs of Goldman Sachs Asset Management, while observing the unnecessary losses from which the investors were victims, breaks the silence, qualifying the ESG approach adopted by the company as “lazy”.
In fact, the company has been focusing on tech for its ESG investments. Investors who are overweight technology stocks have been exposed to the significant drop in the value of the Nasdaq 100 and the hawkish policy of the Federal Reserve. Barrs points out how many funds such as the world’s biggest ESG exchange-traded fund BlackRock Inc. continue to rely heavily on tech.
The “potential missed opportunity” as mentioned in March by some ESG investors to Jean-Xavier Hecker, JPMorgan Chase & Co.’s co-head of ESG equity research is accompanied by indifference towards ESG. In fact, 66% of U.K. retail investors according to a recent survey by Charles Schwab are not willing to pay any attention to sustainable allocation, the maximisation of profits being their first concern.
“Part of the reason you’ve seen material underperformance of some passive ESG solutions is they put deliberate screens and exclusionary frameworks in place to reduce exposure to, especially, carbon assets,” Barrs said. “There’s more flexibility or discretion an active manager can have to try and still build balance in a portfolio against the changing backdrop.”
The GSAM’s head of fundamental equity client portfolio management in EMEA and Asia ex-Japan insists on how ESG is a broader concept than tech. For the long-term success of the ESG strategy, he started his quest for “solution providers to environmental issues” from supply chains of electric vehicle makers, environmentally friendly farming and power usage for buildings.
Source: Financial Advisor