8 / 9 [ ESG ]
“ All the car manufacturers are now transitioning to electric cars and in 15 or 20 years , people will say ‘ I can ’ t believe the air I was breathing ’”
There are signs tobacco ’ s best days are behind it , with stringent taxation making it unaffordable and vaping – which has minimal barriers to entry – offering a cheaper , but less profitable , alternative ; the FTSE 350 Tobacco index has lost a quarter of its value in the past year . However , the point is that if an industry with rock-bottom ESG scores has outperformed over the long term , what is to stop a repeat of this in the future ? For Dudley , the world is now a different place . “ There is a general trend towards health and wellness , and products like tobacco don ’ t fit into that ,” she says . Lode points out this can be seen in other industries as well . “ All the car manufacturers are now transitioning to electric cars and in 15 or 20 years , people will say ‘ I can ’ t believe the air I was breathing ’.” “ It is like smoking , people used to smoke on planes and in restaurants , but people hated it and now it is not acceptable . It will probably be the same with all the car fumes in London .”
Self-fulfilling prophecy McAlevey believes the trend towards socially responsible investing could become a self-fulfilling prophecy : “ With investors demanding greater standards , more money will go into companies with higher ESG scores , pushing up share prices .” There are still sceptics who maintain the belief that a focus on anything ethical will be down to pressure from PR departments rather than any desire from the fund manager . You may attach more meaning to the words of someone like Sorrell , who doesn ’ t feel the need to toe a particular line . It is worth bearing in mind though that while he turned a small basket maker into one of the planet ’ s biggest advertising firms , he was forced to step down from WPP this year when his behaviour fell short of the company ’ s own ethical standards . This serves as a reminder of one of the most important rules of investing : things always change .
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