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00:00The war in Ukraine obviously has has roiled the markets overall but I just wonder from your perspective does that put ESG on the back seat. No absolutely not. The whole point of sustainable investing is to think about allocating capital in a way that's going to allow the world to flourish over the longer term. And the one thing I would say about the conflict is it's made people think about energy independence. So I think actually in the long term renewables and creating your own energy is going to be something that governments around the world are really going to focus on. We're seeing some headwinds when it comes to ESG particular when it comes to renewables. Amanda you've talked about the need for a long term perspective. But if this performance continues to suffer how patient do you think investors will be. Well if you're a pension fund investor you want to invest for your retirement in 30 years time. But the markets historically tend to be quite short termism and actually sustainable investing is about the long term. It's about investing in those businesses that you can see long term growth in and holding those stocks for a long time and show that you're active responsible owners of those investments. So we will always see short term rotations which will affect the valuation of those stocks and investments that are deemed more sustainable if you like. So it's just something that we've had to deal with over the last 20 years in the ethical sustainable and responsible investment industry. How then do you use an ESG ranking and how does it then guide portfolio managers as well. Ultimately there's also some confusion as to which is the more important the E the S or the G. That's a very good question. And what's going to be most important is what is most material to the investments that you are making. We don't like to think about E S or G rather we think about how the businesses we're investing in governs and how they operate. And in that operation it's about how they manage their impact on the world around them their stakeholders their customers their employees. All of these things allow them to have a long term license to operate. So it's not an E S or G and these issues are intrinsically interlinked. We tend to look at the key problems of the world's climate change growing inequalities unsustainable production poor governance systems and switch that on its head to think about how you can allocate your capital to enable a net zero world to protect and promote fairer societies to drive strong governance and business aspects. And all of these things are interlinked. So it's not as simple as saying E is more important than S because actually climate change is one of our most pressing issues but we need it. Just transition in order to get to a low carbon future. Amanda what about the quality and even the quantity of of information and data that we have. I mean for us to be able to figure out if we're doing something correctly there it needs to be a certain standard things like disclosure especially this part of the world where frankly some companies don't even know really what they need to report. What do you need to see these next 12 24 months for us to be able to make some progress on that front. We do have some global standards that have been implemented over the last couple of decades. And getting consistency across global companies around the world is imperative for investors. That said it's very difficult just to use the data that comes out of companies because it is backward looking. It's data that talks about past performance not about a future projection of those companies. So as an axiom invest and we place a lot of time actually speaking to companies about what they see risks. So if you are an oil and gas company you are digging holes in the ground which obviously create environmental risks but you have to take the political landscape into account as you think about business operations going forwards and where you want to invest your efforts. And I guess when on the same vein as David I guess China you do get limited disclosures on transparency when it comes to ESG as well. How do you navigate around China as an investment. And I know they are about to launch some sort of disclosure program as well. What's your view on that. So disclosure programs to bring consistency in reporting I think is really important. We have that in financial accounting. There's no reason why we shouldn't be pushing for sustainability accounting. How do you account for your natural capital how you count fewer employees how you account for your environmental footprint. So I think bringing some consistency will be a real positive. With China what we tend to do is be very active in the investments we're making really trying to understand what the individual stocks and the individual companies are doing. You can take a sec to view different sectors will have different risks and different opportunities for investors. But ultimately you need to be looking at things from a bottom up perspective. If you're an active investor and you know that's what analysts are trained to do.

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The Future of Sustainable Investing

Amanda Young, chief sustainability officer at abrdn Plc, discusses sustainable investing, investor sentiment in the sector and her investment strategy. She speaks on Bloomberg Television. (Source: Bloomberg)

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