Trading Tomorrow - Navigating Trends in Capital Markets
Welcome to the fascinating world of 'Trading Tomorrow - Navigating Trends in Capital Markets,' where finance, cutting-edge technology, and foresight intersect. In each episode, we embark on a journey to unravel the latest trends propelling the finance industry into the future. Join us as we dissect how technological advancements and market trends unite, shaping the strategies that businesses, investors, and financial experts rely on.
From the inner workings of AI and ML to the transformative power of blockchain technology, our host, James Jockle of Numerix, will guide you through captivating conversations with visionaries who are not only observing the future but actively shaping it.
Trading Tomorrow - Navigating Trends in Capital Markets
Aligning Investments with Values: Jason Britton on ESG's Growing Significance
Join us in a captivating conversation with Jason Britton, Founder and CEO of Reflection Analytics as we explore the dynamic realm of ESG (Environmental, Social, and Governance) investing. Learn how Jason transitioned from equity research to creating the SEE methodology, which prioritizes Stakeholders, Environment, and Ethos to address the growing consumer demand for value-based investments.
This episode dissects the potentially transformative impact of ESG investing across different asset classes and markets, delving into the influence of consumer behavior and capital allocation on ESG criteria. Jason offers his insights into the evolving regulatory landscape, including the stark contrasts between the U.S. and Europe.
Don't miss this episode packed with valuable insights for both seasoned investors and those new to sustainable investing.
Welcome to Trading Tomorrow Navigating Trends in Capital Markets the podcast where we deep dive into technologies reshaping the world of capital markets. I'm your host, jim Jockle, a veteran of the finance industry with a passion for the complexities of financial technologies and market trends. In each episode, we'll explore the cutting-edge trends, tools and strategies driving today's financial landscapes and paving the way for the future. With the finance industry at a pivotal point, influenced by groundbreaking innovations, it's more crucial than ever to understand how these technological advancements interact with market dynamics. In today's episode, we have a fascinating discussion about a topic that's reshaping the investment world ESG investing. Joining us is Jason Britton, the founder and CEO of Reflection Analytics, a pioneer in values-based investing and a developer of Reflect, the wealth management industry's most rigorous and scalable platform for ESG and values-driven analysis. Jason has been building portfolios for ultra-high net worth clients, foundations and endowments for 25 years using his proprietary CSEE methodology, which I'll explain a little bit further.
Speaker 1:Today. We'll delve into how his C approach aligns with the evolving regulatory landscape, particularly the SEC's recent amendments to the Names Rule, which require stricter adherence to ESG labeling. We'll also explore Reflect, jason's revolutionary software platform that not only helps investors uncover what matters most to them, but also ensures compliance with these new regulations. Whether you're a seasoned investor, a wealth manager or simply interested in the future of sustainable investing, this episode is packed with the insights you won't want to miss, jason, first of all, thank you so much for joining the podcast today, jim, it's a pleasure. Thank you for having me. So, just to get us started, can you explain what drew you to the world of ESG investing?
Speaker 2:Absolutely so. I got my start in Wall Street as an equity research analyst at a firm called Keefe Broiet and Woods in Hartford, connecticut, covering the insurance sector, and one of the things that struck me as a research analyst was that four times a year when companies drop their earnings reports, everyone rushes around like mad to take the information, synthesize it and get out into the marketplace with their recommendation based on the information the company disclosed. And it occurred to me after about the second or third year in a row of doing that from a rat race perspective, everyone was using the same information. Esg, to me, was a way to compile extra financial information so things that weren't normally contained in that earnings report to try to uncover value and explore how corporations were engaging on human capital practices, thinking about governance and things that I thought really drove value that weren't captured in financial statements. So to me it was about trying to uncover an edge.
Speaker 1:I remember KBW back in the day. So what would you say are the main factors driving the demand now for ESG and value-based investing today?
Speaker 2:I think you can even make that a singular. I don't think you need to make it plural. I don't know that. It's factors. I think it's a factor consumer demand. If you look at women as investors, regardless of age, and you look at millennials, gen Xers and so on and so forth, those folks really are thinking long and hard about where they're spending their money in terms of companies that they're buying products and services for, and they're also starting to think about that as they're coming into the workforce and employing their 401k and buying stocks and bonds. It really matters to them. They see that their dollars are an extension of their voice and they care very much about what they own. And that's why it's become a multi-trillion dollar industry. Not because of regulation, not because of government intervention, but because of consumer demand. That's why BlackRock has a product.
Speaker 1:And you use the C methodology. Can you explain what that is and how it differs from traditional ESG investing strategies?
Speaker 2:Absolutely so. When you say C, I'm going to go ahead and spell that for our listeners it's S-E-E, as in visual C. We came up with that moniker because it stands for stakeholders, environment and ethos, or ethos in our language is culture or ethics. And it's different than traditional ESG, which got its start around avoiding certain kinds of companies and industries alcohol, tobacco, firearms, gaming companies and industries alcohol, tobacco, firearms, gaming, pornography, sort of the big six, if you will.
Speaker 2:C is different. C is about aligning the investor's values. So the actual investor, believe it or not, we do care about the actual investor and what it is that they want in this particular experience called investing, and it's measuring and marrying that to their lens of the world. So C gives us the opportunity, differently than ESG right, because ESG right now, as it sits, is a business decision tool where the big rating agencies are actually providing their view to corporate management on how they avoid ESG risk having nothing to do with the investor. C is investor-focused, it's investor-centric, it's around what do you want to own and why not? What can companies try to sell you? Very nuanced, but different.
Speaker 1:Can you give us a real-world example of where this methodology significantly has impacted investment decisions?
Speaker 2:Absolutely Throughout my career and I'm going to probably age myself a little bit here, not that, if your listeners could see, I'm still in a suit and tie these days, which is a little bit outlandish. There are four companies that immediately leap to mind and I'm going to go back to forward. So take you way back in the day to WorldCom. Most people on this podcast may not have even heard of it A gentleman named Bernie Ebers who decided to basically take over the world, one telecom at a time, using junk debt and funny accounting. I never got comfortable with how all of those vehicles were set up and all of that special accounting and all the one-time charges. When you look at C S-E-E and you look at stakeholders, they were completely mismanaging the human capital side of their business and it stuck out like a sore thumb if you knew what you were looking for. So it helped to sidestep that landmine Company went to zero. Enron and all their creative accounting and all of the fun things that happened there with special purpose vehicles, enriching the CEO and the CFO and the C-suite at the expense of shareholders. That gets picked up in our ethos and our culture, right? Is it a culture of truth-telling and value creation or is it literally manipulation and sort of financial engineering?
Speaker 2:A little further along the path, we have British Petroleum and Deepwater Horizon and all of that. If you looked at dollars spent on a market capitalization basis for fines and penalties, if you looked at how they had offloaded risk onto their partners Apache and Schlumberger and the folks downstream who had really they were on the ground on the platform but it was really BP who was driving the boat you could have avoided that company. It didn't go to zero but it certainly didn't do well for a lot of years. And then a more recent example is Boeing. If you look at how Boeing has created its relationships, it's wildly unfair relationships with its suppliers and the way that it's forcing them into these purchasing contracts and then really incenting delivery over safety and quality. It was just a matter of time. I mean, you can't take two tons of aluminum and move it at 800 miles an hour and not do it safely and expect things to go well. So those are just a handful of throughout the decades where just thinking about these kinds of things would have served you very well.
Speaker 1:Well, the funny thing is three of the four of those. I was the media spokesperson for one of the bond rating agencies during that time, but I put down the tie and put on the golf shirt.
Speaker 2:Well, not to riff on that, Jim, but just again to let a little skeleton out of the closet. I used to work at Lehman Brothers, so I worked for that firm on September 15, 2008, when the credit rating agencies had us on Friday as a single A and we never opened for business Monday morning and went to zero. So I understand what it's like to be a reformed credit rating agency person. You're in good company.
Speaker 1:I think we have some war stories we need to take offline Absolutely. Have some war stories we need to take offline Absolutely. So in what ways does the Reflect platform enhance the value discovery process for investors? And even let's take a step back Tell us about the Reflect platform.
Speaker 2:So the platform is essentially software as a service, which is a fancy way of saying. It's something you access digitally. It is a platform that allows investors meaning asset owners and their advisors, or separately. You can do it in conjunction with a financial advisor, if you have one, or you can use it on your own. That will take you through two distinctly different steps of the process. The first would be what we call you just mentioned it the values discovery process.
Speaker 2:Believe it or not, a lot of people know how they feel about things when presented with a direct question, but it's very difficult for them to articulate from a blank sheet of paper what it is they care about in the world or how they think about comparing things that they care about. I care about the environment, I care about gender equality, I care about access to capital and low-income communities, but do I care about all three of those things equally? There's no real mechanism to have those difficult conversations and do that mental math and that trade-off. We created a process that is digital, that allows someone to get to an answer in a very non-threatening, non-judgmental way. That seems something they can actually implement and execute on. That's good for them. As the values discovery piece. Right, I mean, it's almost think of it as digital financial therapy, but it also is a wonderful tool for the advisor to use, because it's difficult to navigate these kinds of conversations with clients. Right, because, as an advisor, it's my job to provide a high quality advice to Republicans and Democrats, to Christians and non-Christians, to the entire swath, but I want to be able to do it in a way that's authentic to them. How do I do that at scale? Well, you can't unless you have technology support.
Speaker 2:So our entire reason for being was to accurate and automate this discovery process and then give that tool that result the ability to be laid over your existing portfolio, where we're essentially looking for misalignment, mismatch, what do I own? That doesn't jive with what you told me mattered to you. And then, more importantly, on the investor side and the advisor side, how do you fix it? There are lots of things out there that will tell you something is broken, but very, very few that will tell you how to fix it. We wanted to create that entire ecosystem of I know what I want versus I don't, now that I do know where am I at. And if I don't like where I'm at, how do I get someplace better. You've got to be that whole package or there's no real reason to do it?
Speaker 1:Are you looking at specific companies, or are you looking at, you know, equities, or you know, or is it? You know what is the ecosystem in which you're looking at, Because ESG impacts almost every asset class.
Speaker 2:It does impact every asset class, and very astutely, jim. You recognize that it doesn't impact all asset classes equally, right? So in the private market space it's much more difficult to do this than it is in the public market space. It's a little more widely practiced in equities than it is in fixed income. It's got lots more data as it relates to international securities because of the distribution and all of the reporting requirements, for example, like SFDR and some of the other things out of Europe where we in the States are a little behind on carbon accounting and carbon disclosure, but we're trying to catch up. The long and the short of it is is that we cover roughly 6,500 companies, so we refer to them as issuers, right? And whether they're issuing equity or debt, we're really rating the company on that C methodology, that stakeholder engagement, environmental engagement and then that ethos or ethics piece S-E-E, and we're creating a weighting mechanism by which an advisor or their asset owner, investor, client can come in, engage with the system and then be told at the issuer level whether there's alignment. So that could be in your equity portfolio. If that's all you have, it could be in a balanced portfolio by issuer.
Speaker 2:What's interesting to me is that it's very difficult to do in the private markets.
Speaker 2:So that's not something that we have under deep coverage. But those 6,500 securities that are publicly traded think of it as the Russell 3000 plus the MSCI Acquiax US You're talking about 98% of the global market capitalization of everything that trades. So it's a pretty big swath of the universe that you can get a pretty good handle on. So for most investors it will more than sufficiently get the job done in terms of being able to screen in and out things that they have. You can look at individual positions how is Microsoft due relative to other companies in its peer group? You can look at it at a fund level how is the Fidelity Large Cap XYZ doing versus the BlackRock, versus the Vanguard? It's a tool that will allow you to slice and dice and compare anywhere in the funnel my entire account household, my individual retirement account, one particular sleeve of that, one asset class within that, or an individual issuer. It's literally the nesting doll of your financial life that we put under a microscope, using your lens to drive that analysis.
Speaker 1:At some point do you see ESG investing moving beyond the choice of what investments I'm making and moving beyond to impact on pricing of securities themselves?
Speaker 2:So I think it does, and I think it does in two unique ways. The first is right. If you want to just put on your basic economist hat, right, supply and demand. If you are a company that is not thoughtful around these issues, or, worse, if you are a company that is ignoring or flagrantly violating these issues, you're going to have a consumer problem, right, and you're seeing it with boycotts. You're seeing it with the what we call the brand halo and people's willingness to pay, like why, why would someone who's 23 years old spend $60 for an organic t-shirt from Patagonia versus the alternative and the equivalent? Because it's positive, signaling, right and economically. We refer to that as I consider that brand to have something more impactful or more powerful about it that aligns with where I'm willing to spend my capital. So you're going to see that on the demand side. I also think you're going to see it on the supply side, where those companies that are not being thoughtful around these issues are going to not have the same pools of capital that they once did. I mean, best example I can give you and despite the fact that it's a little bit on the nose, how much easier was it for somebody to get a thermal coal project financed 50 years ago than it would be today, the number of big banks that are willing to lend into that industry? Maybe now a handful Firearms manufacturers? Right, when Walmart says we're not carrying ammunition or guns anymore, that messes with your bottom line if it's your single largest point of distribution. So you can't isolate these things and think of them as someone else's problem or a nice to have right. It really is something that's very real.
Speaker 2:And the other dirty little secret about it is and I think we're going to talk about this here in a minute when you look at what's going on in the rest of the world specifically I mean even China on the environmental regulation side. But pivot away from that and look at Europe and the disclosure side. About 30% of an American's company's earnings in the S&P 500 come from Europe, come from overseas. Right, you're going to have to report that way. So I find it very difficult to believe and have trouble stomaching the belly aching that you're hearing from industry around, pushback to the SEC and the commissioner saying, well, we can't get that, it's too onerous to compile that information. But when the European, you know, when the EU said if you don't, you can't sell products here they figured it out. So capitalism is a marvelous motivator and the ability to sell your products into one of the first or second largest market in the world should drive, I think, their willingness to do those kinds of things, those willingness to collect the information and to report.
Speaker 1:You bring up a really interesting point on, let's call it. You know larger systemic issues, right, you know a Target or Walmart you know being a distributor point for, say, firearms or something of that nature, but you know you also mentioned protests and you know a lot of protests lately just seem to maneuver just very short news cycles. You maneuver just very short news cycles. So when you approach the ratings, how are you taking kind of short-term events versus long-term and do you have similar movements in those ratings over time?
Speaker 2:Or what are the triggers? So that's a great question and I think it's one of the fundamental differences between the way we use C and rate companies and the way some of the traditional data providers do. The traditional data providers oftentimes will take company self-reported information and scan it about every 18 to 24 months. I think is sort of their general rule of thumb. What's particularly distressing about that is where the company doesn't disclose a piece of information. Oftentimes they will use an industry average and not necessarily tell you that that's what they're doing, because they don't want to have holes in their ratings, because they get paid based on coverage and they get paid by the companies themselves.
Speaker 2:Back to your credit rating conversation. Earlier we had right. If I'm asking you as MSCI or someone else to rate my company and I'm paying you to do that, there's a moral hazard, conflict of interest there. We don't allow companies to influence their rating or to pay us to have coverage. We collect the information, break the companies into their corresponding gig sector. So healthcare versus healthcare, it versus IT, because otherwise it's meaningless to compare a company. So just pick for random example I'm MSCI and I'm putting ratings out there on the food and beverage space and I've got Pepsi and I've got Coke. I can compare those ratings because they're similar. I cannot compare an A in the consumer staples space with an A in healthcare or financial services.
Speaker 2:The ratings don't translate across. Ours do. Ours are mathematical in a way that, while we have a quartile rating that we then translate into a word not aligned, somewhat aligned, aligned and completely aligned. All we're really doing there and my high school algebra teacher will be very pleased we're running min-max functions, which is not the sexiest math in the world. Who's the best, who's the worst? Find the median, break them into quartiles, assign them a score of one to four.
Speaker 2:Right, I can explain that to my seven-year-old. How many quarters are in a dollar? Okay, do you want three quarters or do you want one quarter? Very easy conversation to have. And that's another thing. I think that's super important. You can't have a black box rating. You can't have a. Oh well, this is what we're putting out in our ratings methodology document, but we reserve the right to alter or adjust what that looks like. Okay, well, alter it and adjust. On whose behalf? On behalf of the people who are paying you for the rating.
Speaker 2:Sometimes In my growing up it was always tie goes to the runner. If everybody's running to first, tie goes to the runner. If everybody's running to first, tie goes to the runner. Here, I think tie goes to the person writing the check and that doesn't sit well with me. I want to take that conflict out of it. So it's a pure mathematical rating. Any company wants to pick up the phone and call me and want to know why they're somewhat aligned on sustainability. I'll walk them through their peers, their numbers, where they shake out, show them the math and say do better if you want a better rating.
Speaker 1:Like don't pay more for your rating, do better. And so you know there has been recent scrutiny on ESG labels, and you know. So, coming back to the Reflect platform, you know how does Reflect verify the authenticity of ESG claims made by funds. You?
Speaker 2:have uncovered the $64,000 question in ESG ratings and in the ESG space in general. Right Up until September of 2023, it never occurred to the SEC to apply Rule 35d1 to anything in the ESG space. Now, for our listeners that have not committed all the 1940 Act to memory, rule 35d1 states that most consumers and I'm paraphrasing have one point of contact with a fund, and that point of contact is its name. So if you say you are a large cap growth manager, the retail investing public expects you to own large cap growth stocks. They give you a little fudge room of what they call the 20% rule. So 80% of your assets have to be in the thing you say you are and you've got a little wiggle room on the other 20%. Now, forever.
Speaker 2:Esg funds could claim sustainability, water, carbon-free, gender equality. They could claim anything they want, religious faith You've seen it all. And there was absolutely no requirement for those portfolio managers or those manufacturing teams to demonstrate and actually attest. Well, why did I pick these securities? Here's the reasons that I put them in this particular portfolio. So best example I can give is if you look at the five largest ETFs in the space with the words sustainable or some kind of environmental moniker in them. Almost every single one of them owns oil and gas companies across the board. That violates, in my opinion now I'm not a lawyer and I'm not a securities lawyer but that, in my opinion, violates that rule black and white. If I say I'm sustainable, the retail public expects me to be sustainable. They have an understanding of what they think that is and I don't think that means they think it's okay for me to own Exxon.
Speaker 2:Rule 35d1, as the commission just voted on it in September of 23, to expand that rule to include ESG terms. So now if I say sustainable Catholic faith, gender equity, I have to sign an attestation form that I submit to the SEC that shows them dollar and position. What I'm saying is aligned with that 80%. I think you're going to see an enormous shift in one of two things the naming and marketing of some of these funds or how they are constructed. From a methodology perspective and that's right where we sit best new compliance software around Rule 35d1, where our tool will allow an auditor, an SEC person, the portfolio manager, risk and compliance inside of the firm to load the holdings, run it against a benchmark, just a non-ESG benchmark or some other traditional metric that they want to put in there and see, on a dollar weighted basis and a names weighted basis, where they are, and they can also then take that tool and because we give them the answers we're all about transparency we'll let them know which of their buckets the name and the weight is in one, two, three or four, the quartiles, right.
Speaker 2:We define alignment as top half or better, right. If you're in the bottom half, you're clearly not aligned relatively peer group. There are lots of other choices, so you could then go into the tool, look at everything that's in that bottom half and say, okay, well, if I sold out of these folks and either added different names or reallocated to the other part of my portfolio, I could bring myself in compliance. It's a powerful tool where the amount of effort and time it would take you to do that with what's currently available in the marketplace you're talking about weeks, not days, and we're talking about minutes, not hours.
Speaker 1:Well, you know it's funny. Ever since Sarbanes-Oxley, the SEC likes everybody to sign something you know. So it's good to know that the paradigm lives on. Let's stay on the SEC for a second. So the SEC's name rule amendment. It stirred a lot of debate. Where does it go from here?
Speaker 2:So, interestingly enough, I get a lot of questions around what happens in a Trump presidency when he fires the head of the SEC and tries to replace the governors.
Speaker 2:Possible right, I wouldn't put it past him, and the reality is, though, is that that particular piece of you know that amendment, those rules, didn't pass three to two, like almost all of the others do. It was four to one, and it was four to one in a unique way, because some of the more conservative-leaning members of the committee wanted those ESG managers to have to sort of self-out right. They wanted to know who they were. They were looking at it from a very different perspective, where, I believe, the left-leaning side of the committee wanted there to be truth and transparency around what investors were looking for protecting the retail clients and essentially, delivering on the value proposition of what that regulator is supposed to do, which is to protect the retail consumer. I think the Republican side of the aisle said we want you to have to tell us who you are so we can figure out and boycott you. So everybody got to the same place by saying, yes, you should have to identify, but they did it with very different motivations.
Speaker 1:So you know, just as we're coming to the close of the podcast, I do want to ask a couple more questions. Obviously, this is Trading Tomorrow, technology trends. So what role does technology play in advancing value-based investing, and where do you see it heading?
Speaker 2:So I think technology is probably the single greatest driver of this growth and its adoption, for no other reason than there's a ton of data that's required and large language models and.
Speaker 2:AI will make the collection and analysis of that data instantaneous.
Speaker 2:Where now it's a really, really laborious process of collecting this information from companies or aggregators, it can be expensive.
Speaker 2:I envision a world where the next iteration of our product is you're holding your iPhone up or Android Didn't mean to throw in a shout out for iPhone but holding up your smartphone and, through the camera lens, literally looking at the world and it's identifying packaging, products, companies and things.
Speaker 2:It's immediately applying your filters, the things that it's learned from you based on interactions you've had with it in past decision purchases, and is essentially in real time, giving you a score. You're walking down the street in Manhattan and you walk by a Dunkin' Donuts, a Starbucks and a Pete's Coffee and it's going to tell you which of those three things has the best fair trade, reasonable price, most employees who've got actual benefits and the best glass door review on. It's a great place to work and that matters to you, so you're going to make an informed choice. I think it's going to make that kind of stuff instantaneous. That's what we're working on anyway on figuring out a way to bring all that stuff together so that you really can make the smart decision. I did that in air quotes for those of you who can follow along, but that smart decision for you, what's best for you.
Speaker 1:I think you should pull in some Yelp reviews, because sometimes you just need a good coffee.
Speaker 2:Well, so you mentioned that.
Speaker 2:And interestingly enough, when we built the product, we sort of had the overarching idea of Yelp being something you were kind of thinking about emulating. But if you talk to anybody who's under the age of 30, they will tell you that a Yelp review probably isn't worth the paper it's printed on because of bots and all the other things that can discriminate against that. That's why we're not looking to crowdsource other people's judgment. If there's something that I did learn in high school, it's that a collective group of young people have a tremendous ability to make a very bad decision. So we want to make it specific to the individual investor and what you care about, not what someone else thinks you should care about or what someone else is telling you to care about. It's the absolute opposite of influencers. You become your own influencer. What matters to you and how do you figure out how to make those purchases on your own?
Speaker 1:It would explain all the selfies on my phone then. So last question, and then I'm going to get to the trend drop. How do you respond to critics who argue that ESG investing may sacrifice financial returns for social or environmental goals?
Speaker 2:So I shake my head derisively and explain to them that when you're looking at investing this way, it is no more or less likely to underperform or outperform than any other methodology, right? If you go back and you look and say, on any given year, 80 of active managers underperform their benchmark, are we willing to? Are we willing to throw out active management as a concept? No, okay. So now you're saying that if I'm not just going to bribe the entirety of the broad market, I'm going to now make some decisions on what it was I want to own thinking about growth versus value, insider momentum or any of the other factors. It's just as reasonable to say has the company paid any fines and penalties to OSHA or the EPA? Has the company had any lawsuits or any other challenges and things that settled in court around its human capital practices, discrimination, racial or gender? I'm talking about really being thoughtful and bringing math and discipline into this. So if you tell me that feel good investing is, I don't buy Philip Morris and I don't buy, you know, alcohol, tobacco, firearms, etc. Those happen to be highly regulated industries that are also subject to taxation and a really big overhang from again that consumer brand perspective, right? Otherwise Walmart doesn't stop selling them If they don't think that they're you know, if they think there's more money to be made. Cvs doesn't stop distributing cigarettes if they think that there's.
Speaker 2:So the reality is the world is shifting and we're actually starting to put a little bit of the blame for some of the stuff that's going wrong in the place that it belongs. I refer to it as accurate social accounting. If you make a product and that product has a result and that result causes some other defect somewhere, like type 2 diabetes or blindness or whatever it is, you need to account for that fact. And as it rolls back through the chain, you can't say the company that you know. Growing up in the Midwest and being a sportsman, you know we would always joke guns don't kill people, bullets kill people, so you don't need to regulate guns, regulate bullets, similar things here.
Speaker 2:Right, when you want to see things go downstream and you want to just hold the supply chain accountable, like the corporate form is unique in the last 100 plus years. Right Since the trust busters and since basically the 14th Amendment was done with Santa Cruz Railroad. You can't give a company the power to exercise its political voice with unlimited capital through a political action committee. You can't give it the opportunity to own vast swaths of land, public and private, and also not expect it to have any responsibility.
Speaker 1:Well, we did get to the last question, sadly, because I have a feeling we could keep going here, but we call this question the trend drop. It's like a desert island question. If you could only give one piece of advice to investors or wealth managers who are just beginning to integrate ESG or value-based criteria into their portfolios, what would it be? And just as a reminder, please keep this section a little bit more to general advice, absolutely.
Speaker 2:It couldn't be any more general than this, which is understand the motivation of the organization or person you are getting that data from that you're using to make the decision. Are they giving that data to you to help you and your clients make better decisions, or are they providing data to you for the benefit of corporate managers, to make them look and feel good so that your client would consider buying them? Greenwashing is the number one thing that I think is keeping me up at night around this, because you're essentially, in my opinion, saying that the ESG marketplace for data right now is just a report card on who's got the best marketing department, and I don't think that's what investors want. They see through that. So that's what I would say Caveat emptor, buyer, beware, be thoughtful around. If you're going to use a decision tool or a piece of information to make an investment decision, make sure you understand. Is that information you're using accurate and whose lens has it been run through before it got to you?
Speaker 1:Jason, thank you so much for your time today. I really appreciate you being on the podcast.
Speaker 2:Jim, my pleasure. Thank you so much for your time and your questions.
Speaker 1:Thanks so much for listening to today's episode and if you're enjoying Trading Tomorrow, navigating trends and capital markets, be sure to like, subscribe and share, and we'll see you next time.