Investing for social and long-term good

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February 9, 2022 12:56 PM ET

Wall Street in New York.


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Mary Altaffer/Associated Press

As a longtime ESG investor, I don’t disagree with much of what James Mackintosh wrote in “Streetwise: Why the sustainability craze is flawed” (Markets, January 24). Understanding risk is what good investors do. The ESG marketing machine has gotten ahead of what it promises investors.

I have a different view of the changes needed for companies to be more socially responsible and mitigate risk. Many make noise about valuing stakeholders, but creating real value requires profound cultural change. ESG-aware investors are able to spot trends quickly. Whether these trends are financially significant in the short term is another story. Although the cost of aligning with the future may be high today, that is where the value will be created. Ignoring ESG issues over the long term will lead to even higher costs.

I also disagree that American capitalism translates into efficient money flows. Political contributions and corporate lobbying give them enormous influence over politicians, and there is often a disconnect between a company’s public commentary and its practices. It’s unfortunate that companies often speak out of both sides of their mouths, especially on climate change. A company can make a bold statement about sustainability while ensuring carbon taxes never see the light of day. Since our divided society is unable to define what is good and bad, investors must take it upon themselves to make the distinction.

Sonia Kowal

Zevin Asset Management

Boston

On “Streetwise: ESG investing can either do good or good, but not both” (Business & Finance, January 25): Orsted’s stock is down 41% from its peak, but it’s still nearly twice as high as when the Danish wind-energy company launched in 2017. And while coal stocks have climbed over the past year, the Dow Jones US Coal Total Stock Market is only about 60% of what it was five years ago. I encourage Mr. Mackintosh to take more of a long-term view when thinking about the value of investments, which sometimes goes beyond gaining one more percentage point in a quarter or a year. ‘another.

david sims

Long Beach, California.

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