Saker Nusseibeh: The ESG debate is guilty of muddled thinking

ESG is a broad church

clock • 3 min read
Saker Nusseibeh CBE, CEO of Federated Hermes

Saker Nusseibeh CBE, CEO of Federated Hermes

In a 2017 paper, I argued that the understanding of investment theory then - which seemed to frame the financial world as being almost entirely separate from the real world inhabited by ordinary investors and beneficiaries - was a significant factor that contributed to the 2008 financial crisis.

Scroll forward a few years and ESG investing has exploded into mainstream asset management. In that sense, the responsible investing approach long advocated by myself and a handful of others has, I'm glad to say, been adopted. The industry has landed on an approach advocated by the 'Father of Economics' himself, Adam Smith. While famous for arguing that "rational self-interest" and competition can lead to economic prosperity, it is less well known that in his Theory of Moral Sentiments he linked prosperity to the "preservation of society". I think Smith would be pleased with how our i...

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