In light of the current macroeconomic outlook, we have been approached by a number of parties, asking how the eco-economics thesis works in a market where the US administration is against environmental and social regulations, and where several companies are dropping their targets.
Our approach remains intact, specifically in this market, given that:
Most incentives in the ESG space are at the state level, and not federal, so while some environmental regulations might be relaxed, the incentive structure remains intact.
Companies that drop targets never intended to meet them in the first place. Eco-economics focuses on businesses that make progress, quarter on quarter, over a five-to-ten-year period, so these programs are embedded into the strategy of the firm.
Having said the above, we actively track companies that drop targets, have ESG / greenwash litigation against them, with a view to taking a short position on these.
Eco-leaders operate by targeting the younger generations (under 30 age group) who aspire to create a digitally interconnected, sustainable future.
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