The End of ESG - with Alex Edmans (author of Grow The Pie & May Contain Lies)

INVESTOLOGY: re-think investment management

Welcome to the podcast that’s now called Investology. This new name reflects the changes that I felet were needed for 2025 onwards. A new year that feels like a new era in the investment world based on the news this January probably not the era we want, but we can learn to adapt and thrive.

Many investment podcasts, that talk about macro, micro or predictions. This is not one of them.

Here we think about investment management and what goes on behind the curtain of financial markets.

With my guests, we will talk about tech and innovation but also the history, the narratives, the principles.

And there’s no better guest to start this year with than Alex Edmans, a professor of finance author and expert in how we use and misuse data and evidence. We discuss his excellent book May contain lies in the previous episode. Alex is also a sustainability specialist and author of grow the pie How Great Companies Deliver Both Purpose and Profit

and also wrote a recent paper called The End of ESG and they will be the subject of this conversation that helped me think about sustainable investind and I hope it helps you too.

I wish you a great year in your personal, professional and your invetsing life!

ABSTRACT from The End of ESG by Alex Edmans

ESG is both extremely important and nothing special. It’s extremely important because it’s critical to long-term value, and so any academic or practitioner should take it seriously, not just those with “ESG” in their research interests or job title. Thus, ESG doesn’t need a specialized term, as that implies it’s niche – considering long-term factors isn’t ESG investing; it’s investing. It’s nothing special since it’s no better or worse than other intangible assets that create long-term financial and social returns, such as management quality, corporate culture, and innovative capability. Companies shouldn’t be praised more for improving their ESG performance than these other intangibles; investor engagement on ESG factors shouldn’t be put on a pedestal compared to engagement on other value drivers. We want great companies, not just companies that are great at ESG. ABOUT ALEX EDMANS Alex's website: https://alexedmans.com/ Alex Edmans is Professor of Finance at London Business School. His TED talk ‘What to Trust in a Post-Truth World’ has been viewed 2 million times and he has spoken at Davos and in the UK House of Commons. In 2013 he was awarded tenure at The Wharton School and in 2021 he was named MBA Professor of the Year by Poets and Quants. Edmans writes regularly for the Wall Street Journal, Financial Times and Harvard Business Review. His first book, Grow the Pie, was a Financial Times Book of the Year. He is a Fellow of the Academy of Social Sciences. USEFUL LINKS 📩 Newsletter: https://bit.ly/3AxnyTY 🎧 Audio Version of the Podcast: https://pod.link/1511595070 TOOLS (affiliate links) What I use for editing, DESCRIPT: https://get.descript.com/1ldhm44pyr0p What I use for multi-currency banking and payments, WISE: https://wise.prf.hn/l/w9gQYA9 TIMESTAMPS (00:00) Introduction and Initial Reactions

(01:44) Questioning ESG and Diversity Metrics (Based on a clip from HBO's Industry)

(02:40) The End of ESG: A New Perspective

(03:21) Understanding ESG Metrics and Qualitative Aspects

(04:37) The Subjectivity and Potential of ESG

(05:39) Conclusion and Call to Action