🎧The End of ESG - Alex Edmans (2/2)
Revisiting the green strategy of Pierpoint (Industry S3) + link to my Custom GPT (The PE Skeptic)
I was always confused about ESG, Impact, Green, Sustainable and other Greenwashing opportunities. This short conversation (8 min) helped me think clearly about it and has reconciled me with the notion of sustainable investing.
Listen to the episode on every podcast platform; watch it on YouTube; or keep reading (NB: based on feedback, I’m revisiting the previous format with quotes from the podcast)
I’ve got also made a YouTube video focused on Alex’s reaction to the Pierpoint board meeting scene (he’s a fan of Industry).
4 thought-provoking quotes
On ESG Metrics
So if ESG was just objective, then it'd be really hard to get a competitive edge. You wouldn't even need people, you could just have a computer algorithm doing it. So what I really think is the really exciting potential of ESG, is it's messy. You need to get your hands dirty. These are difficult things to understand, and this is where human experience and business judgment really comes to play. This is why I do believe that ESG can still outperform even in a world in which we have big data and artificial intelligence. […] Anything important about investing is subjective.
On Diversity
There's so many other aspects of a person than their diversity, and in fact, this is actually bad for minorities, because then people think, okay, you're a good director because of your minority characteristic, and this actually underplays the actual experience and challenge that you might be bringing to the board
On drivers of company value
 ESG is often put on a pedestal compared to other drivers of company value. ESG is very important. But many other things are important, such as strategy, operational performance, capital allocation, and so on. So why is it that we are just looking at the ESG characteristics of an investment and not all these other characteristics which could be just as or even more important than ESG?
Get Alex’s books: https://alexedmans.com/books/
I’ve been experimenting with custom GPTs, and created one fed only with organic, grass fed, differentiated, skeptical, academic sources about Private Equity, such as Ludovic Phalippou’s papers.
The answers still feel a bit too mainstream to me, but there should be some interesting ones. You cn try it here. Let me know how it went please!
I’ve written more about why and how I created it in my other Substack about podcasting and marketing.
My channels
Investorama - Separating Investment Facts from Financial Fiction
Investology on YouTube- Re-Think Investment Management
Educational resources on Alternative Investing
A curation of Alternative Investment startups
Alternative Investment courses
Some tools I use (affiliate links)
Descript: for editing videos, podcasts, and using them as the foundations for articles
Wise: for paying in different currencies and earning on cash balances
Useful links for Brands, Marketers & Podcasters
Orama (my business): helps brands grow with podcasts & videos