Bill Gates says investment in innovation is the important part of ESG

Microsoft co-founder Bill Gates connected Tuesday addressed the contented of businesses that exaggerate environmental, societal and governance credentials, arguing that though firm sustainability credentials are often controversial, they are inactive captious for assessing whether to put successful a company.

"The portion that I judge successful is wherever you accelerate the innovation. To me, it's not truthful overmuch who you don't put successful but who you bash put in," Gates said during an interrogation with CNBC's Diana Olick.

The comments travel aft the Securities and Exchange Commission earlier this twelvemonth projected caller rules that would prevent misleading oregon deceptive claims by U.S. funds connected their ESG qualifications and increase disclosure requirements for those funds.

Gates, who is besides the laminitis of Breakthrough Energy Ventures, a starring clime exertion concern company, said determination is simply a humble fig of companies that volition thrust down the outgo of choosing cleanable exertion implicit alternatives that emit much planet-warming greenhouse gases.

"I springiness radical beardown points wherever they're making those investments and becoming customers of those greenish technologies," Gates said. "The 'E' portion — batch of controversy, but determination is simply a mode to measurement it, and it should beryllium 1 of the factors radical look astatine erstwhile they put successful companies."

Global ESG funds received a grounds $649 cardinal successful investments successful 2021 done Nov. 30, up from $542 cardinal successful 2020 and $285 cardinal successful 2019, according to fiscal services steadfast Refinitiv Lipper. Definitions of ESG often alteration and hard to measure, creating issues for businesses looking to boast their sustainability credentials to investors.

• "The full measurement happening is simply a small immature," Gates said of ESG criteria. "The tract is going to get mature connected that. But having that biology inducement — a batch of investors truly bash privation to get that information."