Assets tied to environmental, social and governance (ESG) benchmarks are projected to grow to more than US$53trn by 2025, or one-third of global assets under management. This is a welcome development. By harnessing society’s resources, markets can be a powerful driver of progress and innovation.
However, markets alone cannot address some of the most important challenges we confront today. Governments must also play their part.
The economist Paul Samuelson argued that modern markets are ‘micro efficient’ but ‘macro inefficient’. What he meant was that it is easier to spot price anomalies in an individual security and eliminate them than to do so for the market as a whole. But Samuelson's dictum is perhaps true on more levels.
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* First published in IFR Asia (30 September 2021)
Photo by Feri & Tasos on Unsplash
