On December 4, 2018, Tony spoke at the Milken Institute’s London Summit on a panel entitled “The Evolution of ESG and Asset Management.” The panel, moderated by Marisa Drew of Credit Suisse, included representatives from CDPQ London, Shenkman Capital, and the UK Local Authority Pension Fund. The video is available here.
Tony describes how Inherent uses ESG as a tool in our investment process, the role and limits of ESG-related data, the potential for strong engagement with corporate management teams, and the importance of pricing externalities. Tony explains how we hear “this Milton Friedman refrain of ‘the social responsibility of business is to maximize its profits.’ But he did say, right after that, ‘within the rules of the game.’ And maybe we didn’t know exactly what the rules of the game were, but now we have this thing called the SDGs [the UN’s Sustainable Development Goals], which is a strategic plan for the planet. And it very much tells us what the rules of the game are. And we believe that those externalities eventually will be priced… Like any good strategic plan eventually we will incentivize performance that is coincident or aligned with that strategic plan. So we consider that in our investment process.”