How else can we think about the S in ESG?

“ESG,” or “Environmental, Social, and Governance” gets a lot of air play in the investing world these days. This is in large part because most “investors” are so dim that they have to hire virtue signalling spooks to invest on their behalf,i but also because cold, black-hearted capitalists like me have taken note of the shifting tide of public sentiment and are taking the not-entirely-incorrect position that a certain amount of social license needs to be purchased while one is raping and pillaging the earth getting laid and getting paid tikkun olaming.

Not that this new! Genghis understood this all too well… in the 12th century AD. After all, humans are social creatures and we’re all on this planet together. But today moreso than ever, access to information gossip has never been easier, and no one wants to be a burnt witch, so of course fire must be fought with fire, and thus we find ourselves in the highly questionable and morally dubious position of greenwashing everything from religiously shipping our garbage to China (aka “recycling“) to withdrawing from the middle east morass (aka “electric cars“) to investing in “progress.”ii I mean, just look at Larry Fink’s bold proclamation that “climate risk is investment risk!”iii But “carbon” isn’t the whole of this top-down-movement-masquerading-as-a-bottom-up-one, even if it’s the one primarily in the spotlight. There’s more here.

For now, we’ll leave G to the side,iv but let’s take this opportunity focus on S: Social. What does it mean to invest in social impact? And what could it mean? Of course we know how social impact investing is usually twisted – diversity boardsfighting homelessness, etc., which I’ve spilled enough ink on already – but I think it’s high time that thinking people with investible capital (and a spine) brainstorm a few other ideas, waddya say?

Anyways, I’m looking to put my money where my mouth is and supplement some of my technological and cultural investments with more investments in local businesses providing 21st century infrastructure, particularly those that strengthen the foundations of our communities. Some of these investments will of course be crypto-related,v but not all. I’m obviously biased towards tech companies since software is eating the world and all that, and how else to leverage an idea catalysed in this little provincial backwater to the world, but we’ll see where this takes us. The way I see it now, I’m not really expecting a return, so from that lens, it’s more like philanthropy with a call option.vi Isn’t that social impact investing in the best sense of the term? That’s my current thesis at least, so stay tuned. There’s some social goodness in this here oven.

Hopefully I’ll have some exciting announcements soon.
___ ___ ___

  1. Seriously, put me down if I ever hire an “investment advisor” (in 2021… who knows what crazy ol’ Pete will want or need!)
  2. Not the progress that gets us to the stars, mind you, that’s bad? Just the kind of “progress” that keeps us chewing our own cud in a dark cave, if only to delay our inevitable domination of the galaxy by a meaningless few millennia. To quote Holden Karnofsky from his recent piece “All Possible View About Humanity’s Future Are Wild” (archived):

    According to me, there’s a decent chance that we live at the very beginning of the tiny sliver of time during which the galaxy goes from nearly lifeless to largely populated. That out of a staggering number of persons who will ever exist, we’re among the first. And that out of hundreds of billions of stars in our galaxy, ours will produce the beings that fill it.

    I know what you’re thinking: “The odds that we could live in such a significant time seem infinitesimal; the odds that Holden is having delusions of grandeur (on behalf of all of Earth, but still) seem far higher.”

    But:

    The “conservative” view
    Let’s say you agree with me about where humanity could eventually be headed – that we will eventually have the technology to create robust, stable settlements throughout our galaxy and beyond. But you think it will take far longer than I’m saying.

    A key part of my view (which I’ll write about more later) is that within this century, we could develop advanced enough AI to start a productivity explosion. Say you don’t believe that.

    • You think I’m underrating the fundamental limits of AI systems to date.
    • You think we will need an enormous number of new scientific breakthroughs to build AIs that truly reason as effectively as humans.
    • And even once we do, expanding throughout the galaxy will be a longer road still.

    You don’t think any of this is happening this century – you think, instead, that it will take something like 500 years. That’s 5-10x the time that has passed since we started building computers. It’s more time than has passed since Isaac Newton made the first credible attempt at laws of physics. It’s about as much time has passed since the very start of the Scientific Revolution.

    Actually, no, let’s go even more conservative. You think our economic and scientific progress will stagnate. Today’s civilizations will crumble, and many more civilizations will fall and rise. Sure, we’ll eventually get the ability to expand throughout the galaxy. But it will take 100,000 years. That’s 10x the amount of time that has passed since human civilization began in the Levant.

    Here’s your version of the timeline:

    df7577516752e7e36d3f636f8f224df3359a8032


    The difference between your timeline and mine isn’t even a pixel, so it doesn’t show up on the chart. In the scheme of things, this “conservative” view and my view are the same.

    It’s true that the “conservative” view doesn’t have the same urgency for our generation in particular. But it still places us among a tiny proportion of people in an incredibly significant time period. And it still raises questions of whether the things we do to make the world better – even if they only have a tiny flow-through to the world 100,000 years from now – could be amplified to a galactic-historical-outlier degree.

  3. Archived. Yes, that Larry; the one overseeing nine-and-a-half (9.5) trillion.
  4. Perhaps a silent day, or perhaps a gingery one.
  5. DeFi is actually a perfect example of social impact investing. Buy $AAVE, for example, and you’re supporting non-discriminatory over-collateralised (ie. non-TBTF) lending at competitive rates to people all over the world!

    Charter cities are another good shout for this category.

  6. This is, incidentally, exactly how I look at “art” as an “investment.” I go into such acquisitions with no particular plans to sell and make a profit, but rather with the intention of honouring strong voices, supporting living artists, and engaging with my community.

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