Despite a pullback amid political hostility, investors and business leaders still recognise that corporate behaviour that benefits the environment also benefits the bottom line
AS A concept, environmentally responsible investing is in its flop era. Right-wing backlash has turned “ESG” into a four-letter word in terrified corporate boardrooms. Donald “Drill, Baby, Drill” Trump is returning to the White House. Bitcoin, possibly the least environmentally responsible investment on the planet, is at US$100,000 and climbing.
But the flop is always floppiest before the dawn, as the kids (absolutely do not) say. Whisper it, but investors and business leaders are still checking the maths and recognising that corporate behaviour that benefits the environment also benefits the bottom line that Milton Friedman told them to value above all else.
No doubt, green investments are having a grim year. Investors pulled US$24 billion from climate-related funds during the first three quarters of 2024, Bloomberg News reported last month, citing Morningstar data. I’d be shocked if that didn’t get much worse in the fourth quarter, during which “Trump trades” of all kinds, including Bitcoin, have been ascendant. Green energy would seem to be the antithesis of a Trump trade. You can already see the damage in the S&P Global Clean Energy Index, which has tumbled in Q4 compared with the S&P 500 Index.
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