Do those financiers believe in sustainability or not?

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Do not let the happy smiling face in my image deceive you. I am dealing with losing my job to this day. Tension on my family. Abandoning our house in London. Broken.

The worst thing is that my country Heretic For nearly three years – in which I thought that climate change is not materials for wallets like other risks, such as, as you know, stagnation and things – will not raise a blow now. This is because during the era of Donald Trump, the financial sector performed one of its most hypocrisy. He no longer seems to believe in sustainability.

The pure zero banking alliance She lost her herd And the goals of the emissions related to financing ReferenceTo gently put it. Meanwhile, good luck finding a wallet manager praying in environmental and social investment and on governance. They will be very busy He once decreased firm obligations To get rid of fossil fuel companies.

This is their loss of belief that the net of the asset managers, “ED), in January. The insurance version is also dead. How did they judge me in 2022 when I wrote on these pages that such initiatives were “CLAPTRAP”.

Was it just a pragmatic issue, I was sympathetic? The pendulum has woke up in the other direction. Companies have always followed money – especially banks. When responsible investments were made in a major investment, a survey said after the survey that customers turned green. Mothers, fathers and institutions alike wanted their savings to “do good.” The flows to sustainable funds reached $ 645 billion in the world in 2021, according to Mooringstar data, including ESG products. This was a quarter of all flows.

Banks were also wealth out of everything from green bonds to research, as well as index service providers, advisors, data analysis companies and more. So yes, the demand was there. And now not. For example, last year sustainable flows were 36 billion dollars from $ 1.5 trillion.

But wait. The net goals or ESG have never been sold to us as friendly opportunities for shareholders and profit opportunities. If they are, fair enough. Get rid of them – the world has changed. No, they were marketed from the beginning as basic beliefs. Sustainability was one of the basic values ​​of each bank. Saving our planet was a target for the director of assets.

Such paintings were never a tongue in the cheek. They have really taken seriously – as the skeptics like me for our cost. But is all this a lie? If not, it is pathetic how easy it is to make the financing industry its debt. If they never believe in sustainability in the first place, we were all transferred on a trip. Who trusts in a banker or a wallet manager again?

Not to mention potential claims for sale. Then, in my opinion, the financing industry has no choice but to find its faith again. It should quickly remind us of the vital role you play in making the world a better place.

I still believe this. And so do you do Many others. The problem is that a lot of sustainable financing 1.0 was defective. It doesn’t matter. What matters is that bankers convince us that they were real in the attempt. It will be again. So the current reaction is an opportunity – to throw misleading practices and improve good bits, while preaching the message that financing is a power for good.

Let’s start with banks. If you are a global sustainability president, I remember the shareholders that 80 percent of the world’s energy still comes from fossil fuels. Do you really want the lights out? It has no meaning in financing to coal, oil or gas companies. It is better to participate and help them move and stimulate the economic growth needed to invest in renewable energy sources.

I would also like to point out that half of the greenhouse emissions come from only three dozens – and 16 of them are state -owned. Banks, as well as governments and organizers, must focus their efforts where they are important. Investors also. But the owners of assets and managers must correct another costly distraction first. As I wrote before, they confuse the investment with trading.

Buying or selling shares in a secondary market itself does not make a difference in anything. Arrows are permanent capital and each investment process must be a buyer – and vice versa. To influence a company you need to own its shares to vote. Exclusion strategies like this is harmful. It is also immoral because you force another person to own the arrows you exclude. The only “investment” that moves the needle occurs in primary markets – investment capital, private shares, direct lending, etc. – where actual money is given or withdrawn. Sustainable financing 2.0 should start here.

Finally, what about Esg? Despite existence Blame for his deathI am a fan. It is not an approach to choosing stocks, although it is not less legitimate than any form of active management. Sometimes it works, mostly no. Instead, ESG is useful as a measure for “Good” Beyond danger and return. Contrary to the above, the organization is needed here. One degree for each company, no argument. Only then people will know what they buy.

In fact, without confidence, he has no chance for sustainable financing. This means being realistic, honest and practical. Less trees, more coherent data and solutions. But the first bankers must prove to us that they believe in it.

Stuart.kirk@ft.com