Late last month, leading materials start-up Bolt threads said it had paused operations for its leather alternative Mylo. The company’s struggle to raise funds points to deeper challenges for the sector, writes Kenneth Pucker.
https://www.businessoffashion.com/opinions/sustainability/next-generation-materials-innovation-mylo-bolt-threads-mushroom-leather/?utm_source=newsletter_dailydigest&utm_medium=email&utm_campaign=Daily_Digest_130723&utm_term=NAD7JRM5XRE2BA7JCY7ZD5EOKQ&utm_content=top_story_2_title
electronics to fashion follow a one-way path of “make, take, and waste.” This linear operating system is straining resources, polluting oceans, and generating mountains of waste. Unrelenting pressure for growth continues to stress biodiversity and accelerate atmospheric warming, thereby increasing the intensity and incidence of drought, flooding, and migration. As a result, the public’s consent to resource-consumptive industries is increasingly at risk.
Vanguard had previously joined the Net Zero Asset Manager’s initiative (NZAM) in 2021, but withdrew 21 months later, citing confusion about individual firms’ views. Vanguard is unique in its ownership structure, commitment to passive index-based low-fee funds, and focus on retail investors. It has taken a more cautious approach to ESG investing and doesn’t heavily rely on external ESG ratings services. Critics argue that Vanguard should compel companies to decarbonize to prevent portfolio losses, but this overlooks asset managers’ primary duty and overstates ESG investing’s impact. Vanguard believes that addressing climate change requires governmental action and that the industry should aggressively endorse this path. Regulatory changes clarifying sustainable investing and a bifurcation of ESG investing can enable more authentic decarbonization. Vanguard’s NZAM withdrawal acknowledges the limits of win-win ESG “solutions” and clarifies the path to urgent decarbonization.
company. But based on my experience as a former executive who is now an 
Most people assume that ESG Investing is designed to reward companies that are helping the planet. In fact, ESG ratings which underlie ESG fund selection are based on “single materiality” — the impact of the changing world on a company P&L, not the reverse. Asset management firms have been happy to let the confusion go uncorrected — ESG funds are highly popular and come with higher management fees. The danger with ESG investing is that it might convince policy makers that the market can solve major societal challenges such as climate change — when in fact only government intervention can help the planet avoid a climate catastrophe
For two decades progressive thinkers have argued that a more sustainable form of capitalism would arise if companies regularly measured and reported on their environmental, social, and governance (ESG) performance. But although such reporting has become widespread, and some firms are deriving benefits from it, environmental damage and social inequality are still growing.
Managers of ESG investments create false hope, exaggerate outperformance, and contribute to the delay of long-past-due regulatory action.