Nikita Singhal on Bloomberg Markets: Asia

On October 10, Nikita Singhal, Co-Head of Sustainable Investment and ESG at Lazard Asset Management, appeared on Bloomberg Markets: Asia to discuss the outlook for Environmental, Social and Governance (ESG), and the role of asset managers in ESG investing.

“Often, ESG is misconstrued as having a particular 'values' orientation. From an investor’s perspective our job is not to engage in any kind of virtue signaling; our job is really to ask: ‘How can we discover and price E, S and G risks and opportunities into our investment strategies of all shapes and sizes, including emerging markets portfolios?” Nikita explained.

“If you have a certain view of ESG, for example a ‘no fossil fuels’ view or a generally ‘non-carbon-intensive companies’ view, you may inadvertently starve companies – especially in emerging markets – of the very capital they need to be able to invest, grow and decarbonize their economies,” she continued.

Later in the segment, when asked to opine on some of the recent controversy surrounding the term ESG, Nikita observed that labels are less important than the investment activity encapsulated under the ESG umbrella.

“We need to focus on the underlying trends. There is such significant investment [taking place], including in the U.S. The Inflation Reduction Act is arguably the largest form of climate legislation in the world and it is driving $400 billion in investment, and 300,000 more jobs. It’s much more an industrial policy, and combined with the cost curve of how these decarbonization-related technologies are going, this is much more of an economic force and not so much what we call it from a label perspective,” observed Nikita.  

She also noted the wealth of opportunities the energy transition presents for investors.

“I think climate change – whether adaption or mitigation technologies – are probably creating one of the greatest alpha generation opportunities for investors like us. If you have a view on how companies are going to provide solutions on the energy transition – especially if it’s backed up with regulation, technology and consumer shifts in behavior – you can find some real gems,” Nikita concluded.

Click here to watch Nikita’s entire segment on Bloomberg.com.