Sustainable ‘Fairy Dust’ Faces Reckoning: ESG Investing

As my colleague Saijel Kishan reported this week, even the person who led a group that coined the acronym for the environmental, social and governance investing movement is predicting an industry “shakeout” over the next five years.

Paul Clements-Hunt said the finance sector has “sprinkled fairy dust” on investment products that do little to account for ESG risks. “Anybody who uses ESG, sustainability or green purely as a marketing device is really heading for trouble,” he said.

His warning comes as Russia’s war exposes some of the dubious choices money managers selling ESG have made. Such funds held about ...