ESG: MSCI Chief Fernandez Warns ESG is a “Permanent Change in the Way Capitalism Works”

January 23, 2020 | ESG and Sustainability, News

“We’re sounding the alarm bells, “ said MSCI chairman and CEO Henry Fernandez on CNBC’s Squawk on the Street.

MSCI is a global index and fund provider. It’s chairman and CEO’s remarks regarding the potential and convulsive effect of ESG on global investing echo those of BlackRock CEO Larry Fink. Fernandez warned that institutional portfolios could dramatically underperform if ESG norms led to common repricing and reallocation of assets globally.

“We are sounding the alarm bells that if you are an investment institution and you’re not embracing this and taking it into account, it’s going to be at your own peril,” said Fernandez as reported by CNBC.

MSCI’s Fernandez: ESG not just a fad

MSCI should know because it rates more than 15,000 companies on ESG criteria. It also published “Principles of Sustainable Investing,”  setting forth its views and recommendations on the core principles and best practices four ESG integration by investors globally.

In the document, MSCI warned of a convergence of factors such as climate change, social attitudes, institutional governance, and technological innovation. This convergence would “significantly impact the pricing of financial assets and the risk and return of investments and lead to a large-scale reallocation of capital over the next decades.”

ESG ratings

The company is working on making ESG ratings available by end of April. These will cover all its equity indices as well as the big mutual funds.

According to MSCI’s Fernandez, the concept is still an evolution, but would eventually become very data-driven. However, ESG is not a fad, but a “permanent change in the way capitalism works,” he warned.

Related  Emission-Free Friday: Here are the Latest Funds to Push for Carbon Neutral

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.


Latest Alternative Investment News
Digital Assets: Epic Lays Off 830 Employees As Metaverse Underperforms
September 29, 2023     Digital Assets, News

Earlier today, Tim Sweeney, the head of Epic Games, shared an email with the company’s employees, announcing some significant changes within the organization. In this message, Sweeney discussed the necessity…
Artificial Intelligence: Mysterious US-Based Books3 Dataset Used To Train AI Was A Massive Trove Of Pirated Books
September 29, 2023     Artificial Intelligence, Latest News, News

Thousands of books penned by some of Australia’s most esteemed authors may have fallen victim to what Booker prize-winning novelist Richard Flanagan has described as “the biggest act of copyright…銅鑼灣_Causeway_Bay_銅鑼灣時代廣場_Times_Square_office_Tower_One_阿里巴巴_Alibaba_Hong_Kong_June_2022_Px3_03.jpg
FinTech: Ant’s Chongqing Consumer Finance Arm Raising $616M To Ramp Up Loans
September 29, 2023     FinTech, News

Chongqing Consumer Finance, the consumer finance arm of Ant Group, a prominent player in China’s financial technology landscape, is currently in the process of raising a substantial sum of fresh…
Venture Capital: Mercury’s Fund V Mops Up $160M For US Startups “Between The Coasts”
September 29, 2023     News, Venture Capital

Mercury Fund, the premier early-stage venture firm with a focus on non-coastal tech hubs, has successfully closed its largest fund to date, Mercury Fund V, with a total capital commitment…