Expert Picks – ESG Investing Books for the Summer

Considering environmental, social and governance (ESG) factors when investing can help you prepare for and profit from what the future may look like. We recently asked our ESG specialists to share what was on their summer reading lists and helped equip their learnings on the topic.

Volt Rush – Henry Sanderson

Emma Wall, Head of Investment Analysis and Research

This recently published book by former Financial Times journalist Henry Sanderson reveals the complicated human and ecological implications of moving to a world of electric vehicles (EVs).

While climate advocates favor ditching gasoline, swapping oil for rare-earth metals is not without impact, says Sanderson, who associates the electric vehicle boom with the industrial revolution. Like their dirty fossil fuel cousins, lithium and nickel mining creates winners and losers.

For many newly minted multi-billionaires, primarily in China, this is not a moral or environmental position, but a huge business opportunity.

Sanderson’s message is that we must be careful that this revolution does not cast the same long shadows of social and environmental inequality as the last generated.

How to Avoid Climate Catastrophe – Bill Gates

Tara Clee, ESG Analyst

The news is increasingly filled with headlines about the climate crisis – from extreme weather events to the growing loss of biodiversity. “How to Avoid Climate Catastrophe” is a practical guide to how we can achieve net zero and a great tool for those dealing with climate anxiety.

Gates highlights the incredible progress we’ve already made in innovating climate solutions and outlines the steps we need to take to change the course of global warming.

A basic concept introduced by Gates is the “green premium” – the additional cost for choosing the emission-free option. For example, it would cost the average American household 15% or $18 more per month to have clean energy.

We want to get to where it’s cheaper for consumers to choose the clean option. These bonuses are a major barrier to reducing our emissions and will require government buy-in, as well as policy changes and incentives, to help make the change.

Fality – Hans Rosling

Tara Clee, ESG Analyst

“Factfulness” is a revealing book on the current state of humanity. Have you noticed how bad news tends to be anecdotal, while good news is statistical?

Rosling illustrates how society has a penchant for negativity and craves the use of facts and data in our decision-making, rather than emotions and instincts. Changing our mindset to rely on statistics will allow us to realize that the world is not as bad as we think.

We tend to think in binary terms, ‘us’ and ‘them’, ‘good’ and ‘bad’. We need to see the nuances to understand the world. Rosling introduces a framework of four income levels to assess international development, instead of thinking of the developed and developing world.

This appreciation of nuances should also apply to ESG investing. It’s not as clear cut as ‘green’ and ‘brown’ funds, as many fund managers take an integrated approach.

False alarm: How the climate change panic is costing us billions, hurting the poor and not fixing the planet – Bjørn Lomborg

Dominic Rowles, Principal ESG Analyst

You might not expect a book with this title to be on our ESG summer reading list. But to truly understand a subject, you must also understand the opposing points of view.

Lomborg doesn’t deny that human-caused climate change is happening, or that it’s a serious problem that needs to be solved. However, he argues that the threat posed by climate change has been exaggerated by politicians and the media.

He also argues that resources could be better balanced between climate change mitigation, such as reducing greenhouse gas emissions, and adaptation such as strengthening sea defenses and reducing waste.

He also argues for a better policy response, including a carbon tax and renewed interest in nuclear power.

Whether you agree with Lomborg’s worldview or not, his book offers thought-provoking and sometimes contrarian reflection on some of the issues that will define our generation.

Make the Cake Bigger: How Great Companies Offer Both Purpose and Profit – Alex Edmans

Dominic Rowles, Principal ESG Analyst

Alex Edmans believes capitalism faces a number of challenges, including rising wage inequality, high environmental costs and soaring carbon emissions. But he argues that many of these problems can be solved if companies are run more responsibly.

He does not deny the importance for companies of making profits – these are often distributed to savers, pensioners and pension funds in the form of dividends. But he thinks it’s also crucial that companies also serve society.

It demonstrates that the most successful companies, both from a profit and social value perspective, are usually driven by a strong purpose. The desire to meet a societal need and contribute to human betterment.

They also think long term. For example, if companies treat their employees well by training and investing in them, it could cost them more in the short term. In the long term, however, workers are more motivated, more productive and likely to stay with the company longer, which benefits all stakeholders.

There is no planet B – Mike Berners-Lee

Laura Hoy, equity researcher

Berners-Lee examines plausible ways to reduce our impact on the environment and how we, as a society, can share the burden.

What sets this book apart is Berners-Lee’s willingness to confront the hard truths of living a more sustainable lifestyle. He says there is more to tackling climate change than introducing more regulations.

The book argues for a change in society’s underlying value system and offers practical ways to start living more sustainably through conscious consumption, sharing and cooperation.

This is a refreshingly simple approach to how we can tackle the climate crisis. It’s accessiblely written, making it a great first read in this category, but it also dives deep enough to appeal to seasoned climate crusaders.

Smartest Guys in the Room – Bethany McLean and Peter Elkind

Laura Hoy, equity researcher

This is an oldie, but a goodie. It offers insight into how far we’ve come in the fight against toxic corporate culture.

The book chronicles the rise and fall of Enron, from underhand dealings and dishonest dealings to outright illegal schemes. It shows how bad business practices can snowball into complete surrender in a toxic environment.

It’s a good lesson in how company culture can make or break a company and underscores the idea that investing is about more than just looking at the stock price.

The World’s Most Important Comic – Various Authors

Laura Hoy, equity researcher

No summer reading list is complete without stories you can share with your family. This hits the nail on the head.

A collaboration between leading environmentalists, celebrities and some of the best comic artists in the world. It’s the perfect way to get your little ones interested in protecting the world around them.

The beautiful illustrations and inspiring stories are great reading on their own, but are engaging enough to share with young readers as well.

Fund managers and fund management companies are increasingly recognizing ESG factors as real risks to the long-term success of the companies in which they invest.

Learn more about ESG investing

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