We have an integrity emergency in fund management
Updated: Jun 9
Do you know anyone who lives in Hull? … How about Skegness? … Or the East of London?
By 2100 – just one lifetime away – all of these cities and more will probably disappear into the sea. Yep. If the climate warms by just two degrees Celsius, they will be underwater. (Source: Climate Central)
It’s shocking. It doesn’t feel real. But it’s already happening.
The red areas will be below water by 2100:
Source: Climate Central
33 million Pakistanis were impacted by devastating floods in 2022, and 7.9 million were forced to leave their home forever (Source: Red Cross).
Across West and Central Africa, it’s a similar story. 3.4 million more people in Nigeria, Chad, Niger, Burkina Faso, Mali and Cameroon were also flooded out of their homes. (Source: UN Refugee Agency).
To make matters worse, these countries are some of the most impoverished, they have little infrastructure to help them adapt.
Source: Inside Climate News
The floods and droughts around the world are not a coincidence. They come from centuries of burning fossil fuels. Scientists warn that 2010 – 2020 was the hottest decade yet. (Source: Royal Society)
Urgent action needed
There's only one way to prevent the world turning into Atlantis: Stop using fossil fuels, and start planting trees.
Burning fossil fuels accounts for 75% of all greenhouse gases and 90% of carbon dioxide emitted. (Source: United Nations)
If we don’t intervene NOW, we will lose our homes. Worse still, we will lose any control over the situation. Uncontrollable forest fires will heat up the planet even more, leading to even more devastating floods.
If there was ever a hill to die on, this is it.
Governments – including our own UK government – are fully aware of the situation. They have been given all the scientific information. They even host global environmental events – like COP 26 in Glasgow - and make pledges to the world. The biggest pledge is that we will keep global warming below 1.5 degrees by 2050.
FYI: This probably won’t prevent cities like Hull, Skegness or the East of London from going underwater.
You would think that governments, banks and other institutions would be falling over themselves trying to find a solution. You’d imagine that they’d be pouring money into renewable energy, carbon capture technology and planting forests all over the UK. You’d think that, right?
But the truth is that they are not. The truth is shady as hell.
The shady truth
Instead of supporting the transition to a low-carbon future, our government is kind of preventing it.
Our politicians are giving record profits to oil companies. Some MPs are even denying climate change. They’re banning television programmes about the climate, including Sir David Attenborough’s latest documentary. Many are even accepting bribes … sorry… no …donations from oil companies, before they vote against climate legislation.
It's disturbing, like really disturbing.
Worryingly, it's not just in the UK though. Around the world, leaders are trying to flake out of the 1.5 degree pledge too. (Source: Financial Times)
We need fund managers to have integrity
This is my appeal to fund managers: Stop putting crap companies in ESG funds. They are super fake. Like, please. How is Coco-Cola good for the planet? And why the actual f*** is Shell included? I found the same holdings in both vice funds and ESG funds!
Let's get real. The EU Taxonomy and SFDR are not exactly bullet-proof. And bending the rules is still kind of easy. For many banks it's systemic. But following them with integrity? That takes real balls. Protecting the planet? That's worth fighting for.
Please. Please. Put the ESG money into companies that will genuinely help us to meet our net zero target. There is $40 trillion in AuM. Probably, as climate disasters ramp-up, even more money will come in.
If we just redirected a portion of this towards genuinely sustainable holdings, we could save millions of lives around the world. $6.9 trillion invested properly each year until 2030 is all that's needed. (Source: OECD) ... Can't you please just be strong and do it? It's worth so much more than whatever's holding you back.
Side note: There is a whole psychological minefield at play, which makes it really hard for investment managers to embrace sustainability. Check out my blog here.
I'm asking managers to be brave. To overcome the inertia and instead be leaders. Now more than ever, we desperately need intelligent and ethical people to lead the way.