Euan Munro is being characteristically blunt. On a rainy afternoon in London, the chief executive of Newton Investment Management is explaining to Euromoney how the most impactful thing investors can do for the environment is to help ‘brown’ companies become green.
“Not engaging with brown companies is maybe going to make your portfolio look a bit more virtuous,” he says. “But you’re fooling yourself if you think you’ve changed the world.”
Whether and to what extent institutional investors should be building concerns around environmental, social and governance (ESG) issues into their product offerings – and the ways in which they should be supervised in doing so – remain topics of fierce debate in the investment community.
Munro’s starting thesis is that because large parts of society care about issues such as global warming, the loss of biodiversity or child labour, then governments must also care – and this therefore raises the risk of financial penalties and litigation.
As
