Responsible divestment? It’s not a black & white issue…

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Alison Taylor has been posting some very thoughtful pieces about how – and if – companies should be pulling out of Russia. Here’s one note (and here is another note):

Should Western companies pull out of Russia? Should they pull out of China? Should they speak up on gun control? What about abortion rights?

I’m quoted, so I’m a little biased, but this is the best and most comprehensive review of the new landscape for corporate political responsibility I’ve read, from Sarah Murray in the Financial Times today. To state the obvious, the topic could not be more timely.

The article covers:

– Why the landscape has changed so fast, and why companies can’t avoid the topic

– How to make decisions on whether or not to speak out

– How to avoid being a giant hypocrite by saying one thing and lobbying for another

– Who should be thinking about these topics internally.

Also see this note from Alison:

Putin’s invasion of Ukraine is being framed as a reckoning for #ESG, but for the wrong reasons. What does it actually tell us?

A month ago, Philippe Zaouati at Nataxis called Ukraine “one of the most important ESG issues we’ve ever had.” Ukraine ISN’T an “ESG issue”, it’s a country. It’s wild how many journalists quoted this without pointing out it makes no sense.

Slamming the ESG industry for missing “Ukraine” off lists of material issues is dumb, not least because mainstream investors failed to predict the invasion too. Talking about whether defense stocks are now ESG is another good example of distracting, shallow discourse.

However, corruption most definitely IS a material issue, for all businesses. The big screw up #Russia has revealed is that companies with significant exposure to kleptocrats, money launderers, oligarchs and state-owned businesses in authoritarian countries are not being identified and flagged in ESG assessments as a matter of course. If you think the G of ESG is just board diversity, you are missing the signal for the noise.

So what? Operating only in “clean” business environments that are also perfect democracies sounds nice, but we can’t all move to New Zealand and Iceland, there’s no room.