“Do you know my favourite Marvel-movie quote?” asked the chairman of the insignificantly-sized investment company Kermitted Asset Management when we finally caught up the other day. As you may recall, he had been away picketing Morningstar’s offices in protest at its decision to question the ‘sustainable’ element of Kermitted’s entire suite of sustainable funds. It seemed tactful not to ask how that had gone.
“I’m surprised you’ve watched a Marvel movie, let alone have a favourite quote,” I said instead. “Adair’s obsessed with them,” explained the chairman, looking affectionately down at the terrier-sized hamster, who doubles as his pet and personal security detail and was now sitting alertly at his feet. “He’s particularly keen on that Thor character.”
“That would explain his cape,” I nodded. “But are you sure it’s safe for him to be carrying that hammer?” “Absolutely,” the chairman nodded. “Well, safe for me. For everyone else, almost certainly not. Anyway, as I was saying, Adair can’t get enough of these films and so one cannot help absorbing bits by osmosis – and this one line caught my imagination …”
“No, no – let me guess,” I interrupted. “Is it the one about ‘great power’ bringing ‘great responsibility’?” “No, it jolly well isn’t,” the chairman replied emphatically. “On the contrary – I always find that idea a real hindrance whenever I try and apply it to running companies or money in Her Majesty’s financial services industry. At least in theory, that is.”
“I was going to say,” I laughed. “I hadn’t noticed it impinging that heavily on you in practice. So what particular nugget of Marvel wisdom did catch your attention then?” “I believe it is a line attributed to Captain America’s former sweetheart, Peggy Carter,” expounded the chairman helpfully. “And it goes: ‘Compromise where you can – but where you can’t, don’t.”
“Stirring stuff indeed,” I nodded. “But why mention it now?” “Well, y’know,” sighed the chairman theatrically, “whenever he’s picketing the offices of one of the world’s largest ratings agencies for weeks on end, with nothing to get him by but a selection of witty slogans, a flask of decent scotch and a large rodent dressed as a cartoon Norse god, a man cannot help but get to thinking.
“And it occurred to me that, when it comes to dear old ESG investing, there really needs to be another way. I mean, as things stand, there’s not a lot of nuance in the field, is there? There are very few shades of green as all the shoutiest people paint ESG as an ‘either/or’ question and, importantly, if they do not see you as being in their camp, they automatically stick you in the other one – and then things get nasty.”
“You manifesto intrigues me,” I said – mainly because I felt I hadn’t spoken for a while. “Please tell me more.” “Well, it’s funny you mention manifestos,” the chairman continued, “because that approach – of painting the problem in the broadest terms, pitching polar opposites as the only two options, stirring up passions and decrying any kind of expertise that contradicts your own position – may work in politics …
“Indeed, now I say it out loud, it’s worked so well for that old broker drinking-buddy of mine from back in the day – loved afternoon strategising almost as much as me but got a bit one-track on Europe as the years wore on … can’t seem to remember his name – that, having pulled it off once, he’s apparently going for a sequel. Still, as I say, while it may work in politics, I have found myself questioning how helpful it is in the real world.
“And this does seem to have been one of the very few not-horrible consequences of Russia’s invasion of Ukraine: the realisation by Western policymakers that a rush to scrap existing forms of energy without first ensuring the affordability, availability and so forth of more environmentally-friendly options – and along the way becoming more dependent on some of the less geopolitically-savoury areas of the world – could have been better thought-through. And, as Peggy Carter teaches us, that a more pragmatic approach to ESG would means it’s OK to seek out middle ground – right up to the point you absolutely can’t.”
