It’s true that “doing effectively by doing good” is a fallacy (Opinion, FT.com, October 23) however solely in line with the norms and morality of finance which performed a giant position within the want for environmental, social and governance investing within the first place.
The fallacy which ESG reveals is one which defines revenue or worth maximisation in slender phrases that fail to account for the actual world prices.
It’s a fallacy of accounting which treats the boundaries of the agency as sacred and fallacy of finance that its operate ought to take priority over its function.
Efforts of enlightened accountants to deliver these very actual outcomes into a company account are gaining tempo however they nonetheless run up in opposition to a morality that locations revenue in opposition to function.
Our regulators and policymakers are confronted with related cognitive dissonance after they realise the fallacy of stability is storing up recurring crises of capital that endanger the operate of the system. “Doing effectively by doing good” doesn’t imply that ESG someway “beats the market”.
It implies that finance is now not bent on extracting wealth from the world it doesn’t matter what the price. It means it has discovered its function.
Joint Managing Director, Abundance Funding
Visiting Analysis Fellow, Bauman Institute, College of Leeds, UK