This episode of the Portico Podcast features a conversation with Tariq Fancy — the former CIO for Sustainable Investing at the ~$10 trillion asset manager BlackRock.
He’s also the author of the delightfully thought-provoking essay The Secret Diary of a ‘Sustainable Investor’.
I reached out to Tariq after reading his essay because it raises some uncomfortable truths about the explosion of ESG-related products across public and private markets.
While I agreed strongly with his writing about the nonsense of ESG-related investments in stock and bond markets, I maintained that sustainable- or impact-focused investors in private markets could drive meaningful change.
I also wanted to think through whether the so-called ‘greenwashing’ effect changes with scale.
I know managers whose investments are driving positive environmental and social change in some of the most underserved markets — indeed, some have been featured on the Portico Podcast.
And honestly, I worry that the asset-gathering activities of large-cap firms will not only crowd out the earnest players trying to increase human dignity, but also tarnish the idea that private markets investing can be a positive-sum enterprise.
I also worry about the proliferation of service providers bilking people with asinine accounting and compliance solutions — a phenomenon that famed corporate finance professor Aswath Damodaran refers to as the ESG Gravy Train.
I remember reading an article in the FT over the summer about PwC looking to hire 100,000 people to provide ESG advice and thought the madness must stop — we’re creating entire categories of jobs that inhibit the flow of capital to productive users of financing.
And we all know that scale providers can absorb these costs, thereby entrenching their market position and reducing competition from new entrants and smaller firms.
So, you can see why I was keen to speak with Tariq about these issues, as well as the roles the public and private sectors can play in solving the structural environmental and social challenges of climate change and inequality.
But we also talk about Tariq’s nonprofit, Rumie, which should resonate with listeners of the podcast.
Rumie provides free digital education to learners in over 176 countries, including Afghanistan where one of their big initiatives is to create more content in Dari and Pashto so that women and girls can continue their education despite the return of the Taliban.
I’d encourage listeners to visit Rumie’s website. And, if you’re a fund manager or institutional investor who’s interested in supporting the growth of a nonprofit in the edtech space, reach out to Tariq and say hello.
This podcast was recorded in October 2021.
Read The Secret Diary of a ‘Sustainable Investor’.
Learn about Rumie and sample some of its bite-sized lessons.
Donate to support Rumie’s mission.
Follow Tariq on Twitter.
Read Aswath Damodaran’s post on The ESG Movement: The “Goodness” Gravy Train Rolls On!