The SmugglerTime and again Nasrudin passed from Persia to Greece on donkey-back. Each time he had two panniers of straw, and trudged back without them. Every time the guards searched him for contraband. They never found any.
“What are you carrying, Nasrudin?”
“I am a smuggler.”
Years later, more and more prosperous in appearance, Nasrudin moved to Egypt. One of the customs men met him there.
“Tell me, Mulla, now that you are out of the jurisdiction of Greece and Persia, living here in such luxury – what was it that you were smuggling that we could never catch you?”
“Donkeys”, said Nasrudin.
In the last few years, more and more investment firms are choosing a path of responsible investing, integrating environmental, social and governance (ESG) into their investment decisions. A usual response among many wealth managers is to narrow their field of vision
automatically removing otherwise attractive companies to invest in.
Airlines being consumers of jet fuel are typically companies automatically excluded. But like the customs man in the story, wealth managers who narrow their scope too much will ‘blind’ themselves to the
obvious, a winning opportunity, that also satisfies, by every measure, carbon emission targets set forth under the 2050 mandate.
In his 2020 letter to CEOs, Larry Fink, CEO Blackrock, commented that within industries – from automobiles to banks to oil and gas companies – we are seeing another divergence: companies with better ESG profiles are performing better than their peers, enjoying a “sustainability premium.”
Blackrock owns Air Canada shares, and Air Canada is a global leader in ESG with one of the youngest, most fuel-efficient fleets. Last week the Airline announced its commitment to the 2050 target.
https://vimeo.com/522041298 The timing of this announcement should not be lost on investors given the federal Liberals commitment to exceed climate change targets and a soon-to-be announced sector-specific financial aid package.
One Canadian wealth management group that is ‘
seeing’ the
obvious is CI Investments. Last month, CI significantly increased its holdings of Air Canada shares by 2,270 percent, now owning more than 2.8 million shares. Like other forward thinking wealth managers, CI, with over 1.3 million Canadian clients, jumped into responsible investing early on.
Indeed, a few wealth managers have been able to slip their ‘
contraband’ past the customs man, and like Nasrudin, will become ‘more and more prosperous’ in the coming years.