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Foster Denovo|News & blogs|News|Short-termism is harmful to ESG investing

Short-termism is harmful to ESG investing

Chasing short-term performance is a risk to environmental, social, and governance (ESG) investing, Foster Denovo warns.

Its head of investment research Declan McAndrew told Money Marketing that advisers and asset managers, who think of ESG short-term, risk mismatches with their clients’ expectations.

McAndrew stressed conversations with the client are essential to communicate the longer-term narrative.

He said: “The whole piece about sustainability is that capital will be deployed in its billions and eventually trillions in these areas.

“These solutions are much longer term. If we think about all the governmental pledges for instance, they’re not for next year or the year after.

“The timescale that these solutions require is over the much longer term.

“That’s very difficult, because we’re all very short term, it’s in our nature.”

For McAndrew, the “basic lessons” of investing are still relevant in the context of ESG.

To read the full Money Marketing article click here

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