Do asset managers really need to just seek profits?

– Asset managers need to look within when it comes to responsible investment.
– The purpose of investing should be revisited.

A while back, I blogged about Tariq Fancy, formerly of BlackRock, and his USA Today article that shone a spotlight on fund greenwashing. That blog noted the debate as to whether Tariq was right. And whether the problem centered on a fund’s legal obligation to chase profits. But do they?

In this article entitled “Asset managers need to look within when it comes to responsible investment,” Peter Uhlenbruch of ShareAction warns that internal processes around training and financial incentives will need to be radically reformed if the industry is to meet the demands of the new EU sustainable finance disclosure regulation.

Here’s a note from Jon Lukomnik:

James Hawley and I revisit the purpose of investing in this High Meadows Institute blog: “Contrary to popular memes about greed, making money is not asset management’s purpose. We concede making money is necessary, much like breathing is required for living. That said, few would consider breathing as the purpose of life. We should not confuse an essential input into self-perpetuation with asset management’s broader socio-economic purpose.” But we then take it a step further to consider the twin purposes of investing over the long term.

Along the way we argue for two new concepts: extended risk and extended intermediation.