Expert picks – ESG investment books for the summer

Taking environmental, social and governance (ESG) factors into account when you invest can help you prepare and benefit for what the future could look like. We’ve asked our ESG specialists to share what’s featured on their summer reading lists recently and helped equip their learnings on the topic.

Volt Rush – Henry Sanderson

Emma Wall, Head of Investment Analysis & Research

This newly released book by ex-Financial Times journalist Henry Sanderson reveals the complicated human and ecological implications of moving to an electric vehicle (EV) world.

While climate-defenders are in favour of giving up gasoline, swapping oil for rare earth metals isn’t without impact explains Sanderson, liking the EV boom to the industrial revolution. As with their dirty fossil fuel cousins, lithium and nickel mining creates winners and losers.

For many of the newly minted multi-billionaires, mostly found in China, this is not a moral or environmental stance, but a huge commercial opportunity.

Sanderson’s message is we need to be careful this revolution doesn’t cast the same long shadows of social and environmental inequality the last one generated.

How to Avoid a Climate Disaster – Bill Gates

Tara Clee, ESG Analyst

The news is increasingly filled with climate crisis headlines – from extreme weather events to rising biodiversity loss. ‘How to Avoid a Climate Disaster’ is a practical guide for how we can achieve net zero and a great tool for those dealing with climate anxiety.

Gates highlights the incredible progress in climate solution innovation we’ve already made, and outlines what steps we need to take to change the course of global warming.

A core concept Gates introduces is the ‘green premium’ – the extra cost for choosing the non-emitting option. For example, it would cost the average American home an extra 15% or $18 a month to have clean energy.

We want to get to place where it’s cheaper for consumers to choose the clean option. These premiums are a major barrier in reducing our emissions and will take government buy in, and policy changes and incentivisation, to help make the switch.

Factfulness – Hans Rosling

Tara Clee, ESG Analyst

‘Factfulness’ is an eye-opening book on humanity’s current state of affairs. Have you noticed how bad news tends to be anecdotal, while good news is statistical?

Rosling illustrates how society has a bias towards negativity and implores the use of facts and data in our decision making, rather than emotions and instincts. Shifting our mindset to be based on statistics will allow us to realise that the world isn’t as bad as we think it is.

We have a tendency to think in binaries, ‘us’ and ‘them’, ‘good’ and ‘bad’. We need to see the nuances to understand the world. Rosling introduces a framework of four income levels to assess international development, as opposed to thinking of the developed and developing world.

This appreciation of nuances should be applied to ESG investing too. It’s not as clear cut as ‘green’ and ‘brown’ funds as lots of fund managers are taking an integrated approach.

False Alarm: How climate change panic costs us trillions, hurts the poor and fails to fix the planet – Bjørn Lomborg

Dominic Rowles, Lead ESG Analyst

You might not expect a book with this title to make our ESG summer reading list. But to truly understand a subject, you need to understand the opposing views too.

Lomborg doesn’t deny that man-made climate change is happening, or that it’s a serious issue that needs to be addressed. However, he does argue that the threat posed by climate change has been overblown by politicians and the media.

He also argues resources could be better balanced between climate change mitigation, like cutting greenhouse gas emissions, and adaption such as bolstering sea defences and reducing waste.

He also advocates for a better policy response, including a carbon tax and a renewed focus on nuclear energy.

Whether you agree with Lomborg’s view of the world or not, his book offers a thought provoking and at times, contrarian, take on some of the issues that will define our generation.

Grow the pie: how great companies deliver both purpose and profit – Alex Edmans

Dominic Rowles, Lead ESG Analyst

Alex Edmans believes capitalism faces a number of challenges, including rising pay inequality, high environmental costs and soaring carbon emissions. But he argues lots of these issues can be solved if companies are run in a more responsible way.

He doesn’t deny the importance of businesses making profits – these are often distributed to savers, retirees and pension funds as dividends. But he believes it’s also crucial for companies to serve society too.

He demonstrates that the most successful companies, from both a profit and a social value perspective, are generally driven by a strong purpose. The desire to serve a societal need and contribute to human betterment.

They also think long term. For example, if companies treat employees well by training and investing in them, it might cost the company more in the short term. In the long term however, workers are more motivated, more productive, and likely to stay at the company for longer, benefitting all stakeholders.

There is no Planet B – Mike Berners-Lee

Laura Hoy, Equity Researcher

Berners-Lee looks at plausible ways to reduce our impact on the environment and how we as a society can share the burden.

What sets this book apart is Berners-Lee’s willingness to face hard truths about more sustainable living. He asserts that there’s more to fighting climate change than introducing more regulations.

The book argues for a shift in society’s underlying value system and offers practical ways to start living more sustainably through mindful consumption, sharing and co-operation.

This is a refreshingly simple take on how we can tackle the climate crisis. It’s written in an accessible way, making it a great first read in this category, but it also dives deep enough to appeal to seasoned climate crusaders.

The Smartest Guys in the Room – Bethany McLean and Peter Elkind

Laura Hoy, Equity Researcher

This is an oldie, but a goodie. It offers a peek into how far we’ve come in tackling toxic corporate culture.

The book cornices the rise and fall of Enron, from underhanded dealings and dishonest deals to downright illegal schemes. It shows how bad business practices can snowball into complete capitulation in a toxic environment.

It’s a good lesson in how corporate culture can make or break a business and underscores the idea that there’s more to investing than watching the share price.

The Most Important Comic Book on Earth – Various Authors

Laura Hoy, Equity Researcher

No summer reading list is complete without stories you can share with your family. This hits the nail on the head.

A collaboration between leading environmentalists, celebrities and some of the best comic book artists in the world. It’s the perfect way to get your little ones interested in protecting the world around them.

The beautiful artwork and inspiring stories are a great read all on their own but are engaging enough to share with younger readers as well.

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