Trillium Asset Management
Member: Platinum
Since: 04.01.2021
Since: 04.01.2021
Two Financial Center 60 South Street, Suite 1100, MA 02111 Boston, United States
TRILLIUM: ESG Regulation Could Be Boon for Financial Industry
04.10.2021
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One of the original environmental, social, and governance (ESG) advocates is eagerly anticipating regulations within the ESG industry that would eliminate the false narratives that some fund managers are creating within the $35 trillion industry, reports Bloomberg.
Trillium Asset Management’s CEO Matt Patsky got his start in ESG-style investments back in the 90s before anyone was really even investing in the sector, and believes that today there are very few funds which actually reflect sustainable investing. In 1994, Patsky was the first to introduce a “green-chip” index that contained socially responsible companies.
Patsky welcomes the attention by regulators into the industry, saying, “It brings scrutiny to an area that’s become the wild west, where fund managers have discretion to slap ESG labels on anything." Patsky firmly believes that unless a firm is interacting with the companies it is investing in and pushing them to increase their ESG practices, the fund in question is not an actual sustainability fund.
Regulation is starting to roll through the industry globally; Europe enacted its Sustainable Finance Disclosure Regulation in March, which cuts back on greenwashing and requires actual data to back claims. In the U.S., the SEC is looking at ESG data reported by companies and is considering requirements and consequences for inaccurate claims.
Patsky considers a fund to be authentically ESG if there is pressure on the corporate executives to change behavior and extend sustainability practices, shareholder resolutions filed on the end of investors, and also voting on those resolutions filed by others.
“Unless that happens, most of ESG will largely be ineffective in quickly addressing systemic issues,” Patsky said.
Trillium Asset Management’s CEO Matt Patsky got his start in ESG-style investments back in the 90s before anyone was really even investing in the sector, and believes that today there are very few funds which actually reflect sustainable investing. In 1994, Patsky was the first to introduce a “green-chip” index that contained socially responsible companies.
Patsky welcomes the attention by regulators into the industry, saying, “It brings scrutiny to an area that’s become the wild west, where fund managers have discretion to slap ESG labels on anything." Patsky firmly believes that unless a firm is interacting with the companies it is investing in and pushing them to increase their ESG practices, the fund in question is not an actual sustainability fund.
Regulation is starting to roll through the industry globally; Europe enacted its Sustainable Finance Disclosure Regulation in March, which cuts back on greenwashing and requires actual data to back claims. In the U.S., the SEC is looking at ESG data reported by companies and is considering requirements and consequences for inaccurate claims.
Patsky considers a fund to be authentically ESG if there is pressure on the corporate executives to change behavior and extend sustainability practices, shareholder resolutions filed on the end of investors, and also voting on those resolutions filed by others.
“Unless that happens, most of ESG will largely be ineffective in quickly addressing systemic issues,” Patsky said.
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