Instant Karma Newsletter 9.3.20
  • ESG regulations are shifting, but can governments and asset managers keep up? Millennials and Generation Z are only going to quicken the pace of change. 

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The EU’s plan to require sustainability-related disclosures on certain assets starting in January 2021 is being met with resistance from asset managers, who argue that the deadline does not give them enough time to update reporting and other requirements. Meanwhile, the U.S. is facing investor backlash on a proposed rule from the Department of Labor that would define fiduciary duty in a way that discourages ESG investments.

Transitions, especially thoughtful ones, take time — but the $68 trillion wealth transfer from baby boomers to their children is not just a financial one. It’s a philosophical one. The heirs in the millennial generation and Generation Z are not just in overwhelming favor of normalizing ESG. They are also digital natives who have almost always lived in a world where change is a few clicks away. ESG is fast becoming part of fiduciary duty, not an impediment to it, and asking for a year to collect financial data sounds like foot-dragging even if there’s validity to such a practical task. If the timeline cannot change, asset managers need to think through how they’re going to explain it for the young people who will soon be the owners of those assets.  

In Other News: Sustainable Wedding Dresses, IPO Blocks

The skills gap is increasingly tied to the digital gap. Sustainability is so stylish that one fashion editor is updating her recommendations to include eco-friendly options. Why are some institutional investors blocking changes to the IPO process? More privacy concerns are surfacing for Facebook and Amazon. A multi-asset impact fund gets the French SRI seal of approval. Matchmaking between impact investors and social entrepreneurs needs improvement.

Levity Break