Markets

I recently returned from a research trip to China and was struck by how seriously environmental issues are now being taken by government and town planners. As China continues to develop, environmental issues are increasingly front and centre in what is described in the country as a “war” against pollution.

For fixed-income investors, understanding environmental, social and governance (ESG) factors – as they are financially material to performance – has proven to be critical in assessing an issuer’s fundamental quality.

Last week’s wellbeing budget in New Zealand was based on the Livings Standards Framework (LSF), a set of wellbeing measures that include cultural identity, environment, income and consumption, and social connections. But these provide no overall index of the nation’s performance.

As the federal election approaches, we’re expected to drown in slogans like “lower taxes”, “wage growth”, “franking credit reform” or “negative gearing reforms”. These mostly assume voters are as obsessed as the politicians with economic and financial issues, rather than, say, the kind of Australia they want their grandchildren to live in. There’s no doubt…