A former Abu Dhabi CIO Paul O’Brien sees big role for ESG investing

Investors will soon apply environmental, social in addition to governance standards to global governments as the role of ethics grows from the investing world, according to Paul O’Brien, the former deputy CIO of the Abu Dhabi Investment Authority, which manages more than $700 billion in assets.

“People [are] taking a more ethical approach to their investing. of which has been more tied to environmental issues, primarily in Europe in addition to the United States,” O’Brien told CNBC on the sidelines of the Ned Davis Research conference earlier This kind of month. “nevertheless, genuinely, ethics applies to countries, too.”

One example of This kind of was seen earlier This kind of year. Pharo Management, a UK-based hedge fund, returned $300 million to the Saudi Arabian Monetary Authority after the murder of journalist Jamal Khashoggi at the hands of the Saudi government, Bloomberg News reported.

The report, which cited a person familiar with the matter, said founder Guillaume Fonkenell told some of the fund’s investors he gave back the money as a matter of principle. Pharo Management declined CNBC’s request to comment.

“I suspect we will see more of of which,” O’Brien said. “the idea’s not confined to Saudi Arabia. You might be concerned about any number of countries. You might be concerned about Venezuela, Israel, you might be concerned about the United States, depending on where you are.”

The popularity around ESG investing — which refers to generating investments of which could lead to a positive impact in society — led to record inflows into so-called sustainable funds last year, according to Morningstar data. The numbers show investors pushed nearly $5.5 billion into these funds, bringing their assets under management to $89 billion.

Critics of ESG investing argue of which, while taking into account these factors can mitigate investment risk, the idea can also lead to lower investment returns.

nevertheless O’Brien thinks ESG will become more well-known moving forward, particularly as the idea relates to the actions of sovereign governments in addition to how investors react to them.

“the globe will be breaking up a little bit. You’re getting This kind of multi-polar world; countries are going in different directions in things like technology, internet privacy, even economic in addition to political systems. So, of which’s going to be an interesting challenge for investors,” he said.

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