Markets cannot keep ignoring Trump’s bid for re-election

Standard DigitalWeekend Print + Standard Digital

wasnow $75 per month

Complete digital access to quality FT journalism with expert analysis from industry leaders. Pay a year upfront and save 20%.

What’s included

Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print editionWeekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisGlobal news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts10 monthly gift articles to shareGlobal news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print editionEverything in PrintWeekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisPlusEverything in Premium DigitalEverything in Standard DigitalGlobal news & analysisExpert opinionSpecial featuresFirstFT newsletterVideos & PodcastsFT App on Android & iOSFT Edit app10 gift articles per monthExclusive FT analysisPremium newslettersFT Digital Edition10 additional gift articles per monthMake and share highlightsFT WorkspaceMarkets data widgetSubscription ManagerWorkflow integrationsOccasional readers go freeVolume discountFT Weekend Print deliveryPlusEverything in Standard DigitalFT Weekend Print deliveryPlusEverything in Premium Digital

Impact investing vs ESG: which produces the better results?

Every Thanksgiving, Terrence Keeley asks his relatives to review the funds in their retirement accounts and explain why they selected them. All his younger family members tell him they favour funds investing in line with environmental, social and governance (ESG) principles — because they want to do well, and do good. “And it makes me cry because those funds are doing no such thing,” he says. “They are underperforming and doing nothing to make the world a better place.”

Keeley speaks with some authority on this. With four-decades in the financial services industry, including stints at UBS and BlackRock, he is now the author of a book called Sustainable: Moving Beyond ESG to Impact Investing. In it, he argues for a shift away from risk-focused ESG investments and towards investments that drive positive impact. And he is not alone.

“Our take on ESG is that it’s more about exclusion, about trying to avoid companies that have bad scores,” agrees Nancy Pfund, founder and managing partner of DBL Partners, a San Francisco-based venture capital and impact investment firm. “It does help ensure companies manage risk and meet standards, but doesn’t actively help in solving pressing challenges.”

Broadly speaking, ESG investing lies at one end of the sustainable investment spectrum and impact investing at the other. ESG criteria are used to direct capital into existing companies trying to improve their social and environmental footprint. By contrast, with impact investing, capital is directed into enterprises or funds that were created with the goal of having a positive impact.

When it comes to public markets — the focus for much ESG investing — there are certainly opportunities to have a positive effect. Investing in renewable power companies, for example, contributes to a cleaner global energy system.

However, as the ESG approach tends to focus more on creating an environmentally and socially responsible share portfolio rather than a cleaner, more equitable world, investing in this way can often exclude companies or regions offering opportunities for impact.

For example, in 2022, an Intellidex study conducted for the UK government found that, by screening out investments that fail to meet benchmarks for factors such as inequality or corruption, ESG strategies actually direct capital away from emerging markets.

Also, at a public company level, ESG investors tend to have less direct influence on sustainability strategies, as they must hold discussions with their fund managers or secure shareholder voting rights in order to get their views

Sustainability-linked bonds falter amid credibility concerns

Standard DigitalWeekend Print + Standard Digital

wasnow $75 per month

Complete digital access to quality FT journalism with expert analysis from industry leaders. Pay a year upfront and save 20%.

What’s included

Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print editionWeekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisGlobal news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts10 monthly gift articles to shareGlobal news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print editionEverything in PrintWeekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisPlusEverything in Premium DigitalEverything in Standard DigitalGlobal news & analysisExpert opinionSpecial featuresFirstFT newsletterVideos & PodcastsFT App on Android & iOSFT Edit app10 gift articles per monthExclusive FT analysisPremium newslettersFT Digital Edition10 additional gift articles per monthMake and share highlightsFT WorkspaceMarkets data widgetSubscription ManagerWorkflow integrationsOccasional readers go freeVolume discountFT Weekend Print deliveryPlusEverything in Standard DigitalFT Weekend Print deliveryPlusEverything in Premium Digital

The other 96 per cent: how to put more charitable assets to work

The writer is chief executive of the Impact Investing Institute, and former chief executive of Guy’s & St Thomas’ Foundation

In 2021, the 300 largest foundations in the UK gave away a record £3.7bn to charities and individuals in need. That money had a huge impact on the world.

But what of the other £87.3bn of assets that those foundations controlled through their charitable endowments? They represented 96 per cent of the money at the foundations’ disposal at the time. What impact did those assets have? And, more importantly, what impact could they have had?

In the past, this question was rarely asked. The impact of endowments, it was said, existed solely in terms of the investment returns that they generated and how these could be spent. However, this narrow view has some inconsistencies.

£87.3bnValue of assets controlled by the UK’s 300 largest foundations in 2021

First, it assumes that a charity’s investments support its mission. That’s certainly not a given. Many investment activities cause serious harm in the world.

Second, it supposes that giving money away is the most efficient way to achieve impact. But why should that be the case? Not every challenge is grant-shaped.

Third, it implies that a focus on impact detracts from performance. This overlooks the huge commercial opportunities that exist in transitioning to low-carbon industries and in reaching underserved markets.

Fourth, it presents two separate identities, and motivations, within one organisation: the institutional investor and the philanthropist. That hardly sounds like a recipe for clear thinking.

But, above all, it’s strangely inattentive to scale. In the UK, endowed charities’ assets are 24 times bigger than their charitable disbursements. Directing just 5 per cent more of these assets towards pressing social and environmental challenges would more than double the amount of philanthropic capital that is targeting impact. To put it in perspective, trying to achieve impact through grant-making alone is like playing a football match with one star player rather than two whole teams.

Fortunately, that was then, and this is now. These days, there are an ever-growing number of foundations looking to generate real-world impact across all their assets.

For example, earlier this year, the US-based California Endowment Fund announced that it would move its entire $4bn endowment toward investments that advance its overall mission: expanding access to affordable healthcare. Similarly, last year, the Australian Paul Ramsey Foundation committed its $3bn endowment to a ‘total impact approach’: looking at how their whole

The UAE’s rising influence in Africa

Standard DigitalWeekend Print + Standard Digital

wasnow $85 per month

Billed Quarterly at $199. Complete digital access plus the FT newspaper delivered Monday-Saturday.

What’s included

Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print editionWeekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisGlobal news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts10 monthly gift articles to shareGlobal news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print editionEverything in PrintWeekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisPlusEverything in Premium DigitalEverything in Standard DigitalGlobal news & analysisExpert opinionSpecial featuresFirstFT newsletterVideos & PodcastsFT App on Android & iOSFT Edit app10 gift articles per monthExclusive FT analysisPremium newslettersFT Digital Edition10 additional gift articles per monthMake and share highlightsFT WorkspaceMarkets data widgetSubscription ManagerWorkflow integrationsOccasional readers go freeVolume discountFT Weekend Print deliveryPlusEverything in Standard DigitalFT Weekend Print deliveryPlusEverything in Premium Digital

Fresh wave of funds aims to kick-start blue bond market

Green may be the environmentalists’ colour, but the planet they are fighting for is overwhelmingly blue. Oceans cover 70 per cent of the Earth’s surface, generate half of its oxygen, and absorb up to 30 per cent of the carbon dioxide produced by human activity. They are also economically important: the UN values the ocean economy at more than $3tn a year, comparable to the UK’s GDP. 

Yet, compared with the boom in green financing for land-based projects, the blue equivalent — financing focused on water and the marine environment — remains in its infancy. 

There are signs, though, that enthusiasm for such projects is picking up in the sustainable finance sector. On the private equity side, several funds with a blue economy focus are on the market.

For example, Ocean 14 Capital, backed by the European Investment Fund, recently raised €200mn for aquaculture and other marine projects. Similarly, Denmark’s Navigare Capital is targeting $650mn for its third fund focused on sustainable shipping and, earlier this month, secured backing from Mitsui, the Japanese trading company.

Now, a joint initiative by US asset manager T Rowe Price and the International Finance Corporation, the private sector-focused arm of the World Bank, is looking to entice bond investors with a new fund.

The aim of their Emerging Markets Blue Economy Bond Strategy is to raise $500mn to invest in “blue bonds”. These are issued by companies in emerging markets and align with two water-related UN Sustainable Development Goals: SDG 6 on universal access to water and sanitation; and SDG 14 on conserving oceans, seas and marine resources.

Of all the UN’s sustainable development goals, SDG 14 suffers from the largest relative funding gap, according to the World Economic Forum. A 2020 study in the journal Marine Policy found that $174.5bn would need to be spent annually to reach SDG 14’s targets by 2030, yet WEF estimated just $10bn was invested in total between 2015 and 2019.

T Rowe Price and the IFC have each committed $75mn of seed capital for the fund and are looking to raise a further $350mn from other investors ahead of a planned launch in December.

Samy Muaddi, head of emerging markets fixed income at T Rowe Price, says there is currently “a lack of dedicated capital” for blue sustainable investment. He hopes the $500mn fund will “help build a market that doesn’t exist”, to fill the funding gap.

Thomas Eveson, global lead for sustainable finance at

Japan’s chip supply chain stocks are still a good way to tap AI trends

Standard DigitalWeekend Print + Standard Digital

wasnow $85 per month

Billed Quarterly at $199. Complete digital access plus the FT newspaper delivered Monday-Saturday.

What’s included

Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print editionWeekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisGlobal news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts10 monthly gift articles to shareGlobal news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print editionEverything in PrintWeekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisPlusEverything in Premium DigitalEverything in Standard DigitalGlobal news & analysisExpert opinionSpecial featuresFirstFT newsletterVideos & PodcastsFT App on Android & iOSFT Edit app10 gift articles per monthExclusive FT analysisPremium newslettersFT Digital Edition10 additional gift articles per monthMake and share highlightsFT WorkspaceMarkets data widgetSubscription ManagerWorkflow integrationsOccasional readers go freeVolume discountFT Weekend Print deliveryPlusEverything in Standard DigitalFT Weekend Print deliveryPlusEverything in Premium Digital