‘Lazy’ ESG Fund Managers Are Caught Swimming Naked as SVB Exposes

Bloomberg | Alastair Marsh and Saijel Kishan | Mar 14, 2023

Image: CFL/ESG

Another market meltdown, and another costly lesson for ESG

• About 915 funds registered under European Union regulations as either “promoting” ESG or declaring it as their “objective” are exposed — directly or indirectly — to the now-collapsed bank, according to data compiled by Bloomberg.
  • On Tuesday, it emerged that SVB’s lack of a chief risk officer for much of last year is being examined by the Federal Reserve as part of its probe of the bank’s failure, two people familiar with the matter said.

See:  A conversation with Catherine McKenna former Minister of the Environment and Climate Change: Fighting greenwashing

• For ESG investors, SVB appeared to tick several boxes. The bank was a big lender to renewable energy companies, a favorite among ESG managers on the lookout for low carbon footprints. But when it came to governance risks, fund managers seem to have been less attentive.
  • For the ESG investment industry, the collapse of SVB may go down as a textbook case of what happens when an asset manager tries to build a climate portfolio without doing proper due diligence on social and governance risks.
  • ESG fund managers often tout their engagement strategies, whereby they meet with portfolio companies and go over the risks that need addressing. But given SVB’s “A” rating at MSCI Inc., and a “Controversy Level” of zero at Sustainalytics, it’s likely that portfolio bosses didn’t think the bank was in urgent need of improvement.

Continue to the full article –> here

The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada’s Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

Share for a Chance to Win FREE #FFCON23 Virtual Event Tickets!! As a part of the lead-up to this exciting event, NCFA will be holding a social media contest for the chance to win FREE tickets to attend. In order to be entered to win, all you’ll need to do is share any of our event posts or create one of your own through your Facebook, Twitter, Instagram or LinkedIn personal or company page, tag @NCFACanada, and use #FFCON23. Winners will be contacted prior to the event. We look forward to seeing you there! Support NCFA by Following us on Twitter! Follow @NCFACanada