INTELLIGENT BRANDS // Green Technology

The bullish analysis from Nigel Green of deVere Group comes as Norway ’ s $ 1.6 trillion sovereign wealth fund bucks the recent trend among institutional investors by saying it will continue to advocate for investments based on environmental , social and governance , ESG factors . It also follows reports that BlackRock , the $ 9 trillion asset manager , was estimated to have more than tripled its security spending on CEO Larry Fink in 2023 , following criticism over the firm ’ s pro-ESG investments stance .

The backlash against ESG has not only drawn widespread public attention , but also exacerbated a growing divide across the Atlantic .

While investment firms in the EU proudly tout their endeavours to swiftly achieve net zero

Nigel Green , CEO deVere Group greenhouse gas emissions , among other goals , numerous counterparts in the US are either sidestepping the issue altogether or claiming they must prioritise client preferences .

Nigel Green comments : “ ESG has become a lightning rod for controversy , particularly in the US where Republican lawmakers , among others , have framed it as woke capitalism , at odds with traditional investment principles .” The resultant backlash , including blacklisting of major financial groups and legislative restrictions in certain states , underscores the urgent need for a re-evaluation of ESG frameworks .

“ But we believe there is a transformative potential in emerging technologies , particularly Artificial Intelligence , AI , which will redefine and revitalise responsible investing .”

AI-driven risk management tools offer precision in aligning investment portfolios with investor-defined ESG objectives . Optimisation algorithms can construct diversified portfolios that not only maximise financial returns but also mitigate ESG-related risks .

By incorporating sophisticated risk modelling techniques , AI quantifies and manages ESG-related risks , enhancing the resilience of investment portfolios in the face of environmental , social , and governance disruptions .

AI ’ s transformative potential extends beyond financial markets to real-world impact , particularly in environmental and social domains . For example , AI-powered geospatial analytics and remote sensing technologies enable investors to monitor and assess environmental metrics such as carbon emissions , deforestation rates , and water usage with unprecedented accuracy and granularity .

By integrating satellite imagery , IoT sensors , and AI algorithms , investors gain real-time insights into supply chain sustainability , identify potential ESG-related risks , and drive targeted interventions to mitigate environmental degradation .

With social impact investing , AI-driven analytics can assess companies ’ social license to operate and their contributions to societal well-being . By analysing demographic data , socioeconomic indicators , and community sentiment , investors can gain insights into companies ’ diversity and inclusion practices , labour standards , and community engagement initiatives .

While the rift between EU and US investors on ESG widens , there remains a common ground : the recognition of individual investors ’ growing interest in responsible investing . Yet , to harness this momentum effectively , a fundamental shift is required in how we evaluate companies through an ESG lens .

This shift goes beyond mere rebranding ; it necessitates a major change in assessment methodologies , moving away from rigid scores and checklists towards deeper , more nuanced analyses aligned with investor priorities . p

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