Terrence Keeley
Terrence Keeley, an alumnus of the University of Notre Dame and Oxford University, was the Managing Director and Head of the Official Institutions Group at BlackRock, Inc. His career spans various prestigious roles, including founding Senior Managing Principal at Sovereign Trends, LLC, and Senior Managing Director at UBS Investment Bank. His expertise has influenced global financial governance and cross-border capital movements. Notably, he contributed as a consultant to Pope Francis' financial reform commission and co-founded the Financial Hippocratic Oath movement. His personal life includes marriage to Saskia Bory and fathering two sons.
Jordan B. Peterson Podcast #410 with Terrence Keeley – Impact Investing and ESG: A New Frontier in Ethical Finance
In a groundbreaking episode of the Jordan B. Peterson Podcast, episode #410, Jordan Peterson engages with Terrence Keeley, a BlackRock executive and skeptic of the widely discussed Environmental, Social, and Governance (ESG) investing. This insightful conversation illuminates the complexities of ethical investing and its implications for the future of finance, society, and the planet.
The Essence of the Conversation
The dialogue unfolds with Peterson exploring Keeley’s experiences and insights from various prestigious forums, including the AR conference in London. Keeley, with his profound expertise in ESG investing, voices skepticism about the practicalities and impact of what is considered ‘ethical investing.’ He delves into the necessity of formulating a positive vision for the future, financial and otherwise, and examines the details of the 2008 financial crisis and the role of negligence and willful ignorance in the management of the world’s finances.
The Rise and Critique of ESG Investing
Keeley traces the origins of ESG investing back to post-WWII initiatives and the United Nations’ sustainable development goals. He explains how ESG emerged as a means to align investments with broader societal and environmental objectives. However, he critically assesses the practical outcomes of ESG strategies, arguing they often miss the mark in effecting real change and can lead to detrimental market consequences. Instead, Keeley champions impact investing as a more direct and effective means of marrying financial returns with societal benefits.
Impact Investing: The Path Forward
The podcast sheds light on various successful models of impact investing and social entrepreneurship. These models not only promise competitive returns but also address critical social issues like affordable housing, energy poverty, and access to education. Keeley passionately shares examples ranging from effective affordable housing initiatives yielding significant returns to transformative educational programs reducing recidivism among youth.
Delving Deeper into Impact Investing: Solutions, Personal Responsibility, and the Call for Change
In the continuation of the enlightening Jordan B. Peterson Podcast #410, Terrence Keeley further elaborates on the transformative power of impact investing, contrasting it with the criticized Environmental, Social, and Governance (ESG) strategies. This second installment focuses on practical solutions and individual contributions to societal well-being.
Impact Investing: The Road to Real Change
Keeley offers a compelling argument for impact investing as a viable alternative to ESG strategies. He emphasizes the importance of investments that create verifiable positive impacts on society, highlighting various successful models such as affordable housing programs and educational initiatives. These models not only promise competitive returns but also address critical social issues, demonstrating that with sufficient judgment and care, investors can indeed have their cake and eat it too.
Participation and Action: How Can We Contribute?
The conversation takes a turn towards how individuals can participate in these transformative initiatives. Keeley suggests his curated platform, the Solutions Forum, where ideas and strategies for social issues like homelessness and education are shared and discussed. Additionally, he mentions other global exemplars of hope like the UK’s ‘Make it Click,’ illustrating the multitude of opportunities for volunteerism and investment that contribute to societal betterment.
A Personal Reflection: Working with Pope Francis
Keeley shares a personal anecdote about his time working with Pope Francis, offering a glimpse into the compassionate heart of the pontiff. He narrates how Pope Francis personally invites homeless individuals to mass, reflecting the broader theme of the conversation: the importance of caring for and uplifting the marginalized. This section underscores the moral underpinnings that drive Keeley’s passion for impact investing and societal improvement.
Financial Health and Mindfulness
Highlighting the significance of being mindful about financial health, Keeley compares it to physical, emotional, and mental well-being. He advises listeners to be prudent with their savings and investments, emphasizing the importance of long-term planning and mindful investment strategies. This section serves as a practical guide for listeners, encouraging them to take control of their financial future while considering the broader impact of their investments.
Exploring the Realities of Impact Investing and ESG: A Shift Towards Meaningful Change
In the final third of the Jordan B. Peterson Podcast #410, Terrence Keeley, a BlackRock executive, continues to shed light on the intersection of ethical considerations and investment strategies, particularly focusing on Environmental, Social, and Governance (ESG) investing and the promising world of impact investing.
The Flaws of ESG Investing
Keeley dives deep into the pitfalls of ESG investing, expressing skepticism about its practical impact and effectiveness. He articulates that while the intentions behind ESG are noble, the application has often been counterproductive. For instance, some ESG enthusiasts might exclude ‘non-virtuous’ companies from their portfolios, like those in the oil and gas sectors, mistakenly believing this will significantly impact global temperatures. However, Keeley argues that this approach is fundamentally flawed and oversimplified. It often ignores the complex, multivariate nature of global issues and fails to make a meaningful impact where it truly matters. He notes that, historically, avoiding ‘sin stocks’ hasn’t halted the consumption of the products they represent, suggesting that ESG strategies might be similarly ineffective.
Impact Investing as a Solution
Keeley champions impact investing as a superior alternative to ESG. Unlike ESG, which often fails to deliver on its promises, impact investing focuses on generating tangible, positive societal impacts alongside financial returns. He provides examples like affordable housing programs that not only yield competitive returns but also address critical social issues. Keeley stresses the importance of ‘verifiable additionality,’ ensuring that each dollar invested genuinely contributes to a solution that wouldn’t exist otherwise.
Personal Responsibility and Community Involvement
The conversation also highlights the importance of personal responsibility and community involvement in addressing societal issues. Keeley discusses various successful programs, such as mentorship initiatives that significantly increase college completion rates and courses teaching Aristotelian ethics to reduce teenage recidivism. These examples underscore the potential for well-conceived programs to make substantial differences in individuals’ lives and society at large.
How Can You Get Involved?
For those interested in participating in impactful programs or seeking investment advice in this realm, Keeley advises careful consideration and due diligence. It’s crucial to ensure that any investment or program genuinely creates the desired impact without unintended negative consequences. While specific advice or recommendations are beyond the podcast’s scope, the emphasis is on the importance of mindfulness and informed decision-making when venturing into impact investing or supporting social programs.
Conclusion: A Call for Thoughtful Action
As the podcast concludes, Keeley’s insights offer a compelling call to rethink traditional investment strategies. By focusing on impact investing and supporting programs with proven effectiveness, individuals and investors can contribute to a more inclusive, sustainable, and prosperous future. It’s an invitation to not only seek financial returns but also to be part of the solution to the world’s most pressing challenges.