“ESG Investing: Pitfalls and Potential Opportunities”, Lenka Martinek, Sustainable Market Strategies

The IRF Podcast

The IRF is joined by Lenka Martinek, Managing Partner at Sustainable Market Strategies (SMS), an ESG consultancy firm that specialises in bespoke environmental, social & governance-related research and investment advice.

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ESG investing has become an essential aspect of the services that many financial institutions provide for their clients. Given the growing popularity of ethical investments, environmental, social and governance considerations will inevitably become a more important part of portfolio investment decisions in the future. In this podcast Lenka Martinek discusses the evolving geopolitical factors that are influencing the prospects for ESG investments.

Lenka explains how the Russian invasion of Ukraine has led to a re-evaluation of the global defence industry’s ESG credentials and highlights those factors that can be considered more acceptable, or totally unacceptable, from an ESG perspective. With respect to the solar industry, Lenka highlights the various issues related to China’s very poor ESG rating and identifies alternative ways to invest in the renewable energy sector. She also highlights some of the positive and negative factors for ESG investors in the water resources sector.

On a broader perspective, Lenka explains the different approaches to ESG investing in both relative and absolute terms. She notes the importance of the relative performance of the oil sector and the tech sector. In conclusion, Lenka highlights the advantages that come from having a comprehensive knowledge of ESG megatrends, and she indicates how SMS can evaluate these trends to better understand the markets and to make profitable investment decisions.

Founded in 2018, Sustainable Market Strategies is an independent investment strategy research service that tracks global developments in the ESG and Impact-Investing space. Also known by the firm’s initials, SMS publishes forward-looking, independent and actionable investment research. The SMS team has a total of over 50 years of experience in capital markets, finance, economics, policy, academic research and sustainable investing. They look at sustainable investing trends, taking a global, top-down and thematic approach, and tailor their views to global market conditions.