march 5, 2021, 19 of those funds performed better than the s&p 500. the big question is, does esg change the practices of companies? a study published in may by the european corporate government institute shows it's unclear the authors found increased esg investment in companies did not lead the recipients of those funds to reduce pollution, improve work place safety or increase racial diversity on their boards so a direct change or not, the mind-set of an entire generation of investors is no doubt changing >> kristina, one of the other questions people have first and foremost about funds is the cost in other words, when people are buying access to what oftentimes is very similar to index funds and, like you say, raises questions how much difference they're really making, are they also losing performance in the former funds because they carry higher than, say, an index fund? >> reporter: true. but that's what the study that was in this report -- you do

have quite a bit of return because often these esg funds or companies that scores are a little bit more transparent. so we're not sure yet if that's the reason why sometimes the returns are better or is it because of the efforts that they're actually putting in place? but to your point, if we're talking about those funds, a lot of them do carry technology, too, which could distort some of the returns. >> yeah, by transparency, more of it a good thing, raises performance. maybe that's a key play here thank you very much. kristina partsinevelos as you just heard from kristina, there is a lot of money pouring in to esg, but how do portfolio managers define it, and what do they look for when deciding what exactly to invest in valerie grant is a senior vice president and senior portfolio manager of responsible investing at alliance bernstein. and john is the director of the esg investing arm at ariel investments. one of the longest standing investors in this area

welcome to both of you john, would you pronounce your last name? oxtaby >> you have it right >> valerie, welcome back let's talk about these definitional issues. when you talk about building a portfolio of environmentally, social, and governance -- not pure but outstanding companies, what are you looking for exactly? how do you measure it, valerie >> we measure it in multiple ways, and actually we look at the underlying data rather than a third party rating as a way of assessing the portfolio overall. so when it comes to environmental stewardship as an example, we look at the carbon emissions and carbon intensity of our portfolio relative to the broad market our benchmark is the s&p 500 on social issues, we have third-party data that we're able

to scrape from sources like glass door we also look at the corporate equality index, which is a very robust measure of lbgtq equity practices. and if you look at the board of directors, we have a lot of data on the composition of the board. 23 different indicators that we have used to create our own board effectiveness index which looks at everything from the independence of the board overall and the various committees to the diversity on the board. and so there are a range of different data sources available. some are disclosed by the company, but others are data sources that you have to go out and find in order to create a mosaic >> so, john, i know we're going to talk a lot about this throughout the program the g in esg investing refers to governance and valerie just talked about board composition and so forth i want to talk about the composition of the shareholder base and how some companies that might seem on the surface to be

esg companies actually have governance issues in them because they have dual categories of stock where one stockholder is really the controller of voting shares and others don't have control there. can a company that has that kind of governance meet your hurdle for being in an esg portfolio? >> sure. i think we would take that on a case-by-case basis and when you get in there and talk to management teams and get to know their strategies for success i think it will come out in terms of how the unique structure of governance might set up a company for success over the long run i think it's important to note that our approach to esg is really all about enhancing long-term returns. at ariel we'll invest in companies, some of whom are not leaders and focus on working with them to help improve and we think that's really the key to success especially in a small

and mid cap space where there's room for improvement >> i find that very interesting. in other words a company doesn't -- well, number one, does not have to have -- it's fine for a company to have dual shareholder classes, i hear you say. that's not necessarily a disqualifier, but also not a disqualifier is a company that would not otherwise meet the standards of hesg but one you think you can work with to improve. have you had demonstrable improvement results when you've done that and so those companies that didn't meet the standard now do >> yeah, i mean, i think especially in our part of the market, the small and mid cap space, investors have an opportunity to affect real change and we've seen that over our history. we can count over 50 instances, for example, speaking of governance, where portfolio companies following ariel engagement. >> let's go back to you,

valerie. i want to turn to a couple of companies on your list, one of which might surprise people. your picks, these are companies that your fund either owns or your company does, etsy, the crafts company general motors, which might surprise a lot of people even though they're moving towards electric vehicles strongly and keysight technology, one i'm not familiar with off the top of my head you can explain it to me >> sure. so starting with keysight, keysight provides electronic testing and services you're right it's not a very well-known company. as we looked at it, we liked it on the three dimensions that we used to assess companies on a forward looking basis. first there has to be an esg rationale for owning the company and that's based on the material, environmental issues we identify. secondly there has to be substantial return potential and then thirdly we have to like the competitive dynamics within

the industry and competitive positioning of the company and this is one that really meets that criteria. the big surprise here was that this is a company that really operates at a highly technical space. however, they have outstanding diversity statistics, and they also disclose them which is unusual. and if you look at the data that i shared with you in preparation for this show, they are pay equity in particular was virtually at parity globally which is almost unheard of particularly in the technology sector, financial services, virtually any sector >> when you talk about pay equity -- excuse me for interrupting, valerie. are you talking about pay equity between women and men? >> in this instance it is based on gender, and they've disclosed the gender pay equity globally and have broken it out by region again -- >> go ahead. one of the things you like about etsy is that 48% of the workforce and 50% of the board

are female, all the highest in the technology sector targets to ensure 50% or more suppliers are owned by women, minorities or veterans by 2022 that explains why that one is in there. now talk to me a little bit, and then i want to get to, john, your picks talk to me about why gm is an esg company, a leader. >> general motors, i know. my dad was a cadillac driver his entire life. he would be quite happy that i own this company i'm telling you, general motors, i think, has come a long way both in terms of its fundamental strategy focused on electronic vehicles, and they are serious and aggressive about shifting in that direction and also shift to go rely on renewable energy in the manufacturing of those vehicles we spent a lot of time with the company understanding where their emissions are coming from, whether it's scope one, two or three, and they seem to have a very solid plan for emissions

reduction over time. >> i apologize for interrupting so much. >> they have a female ceo. it doesn't stop there. if you look at the pipeline and the board, it's actually quite compelling >> forgive me for interrupting so frequently there. i know you understand we have a lot to cover i want to get to john and his picks. there are two that stand out to me e axalta and stanley black & decker are these esg picks because they, themselves, are environmentally, socially and governmentally responsible or because they are in lines of business that are benefiting from the trend to environmental responsibility for example, axalta, they do coatings relative to internal combustion engines and ev adoption that presents a material growth opportunity as

electric motors require more of those coatings it's kind of a derivative player, a second order play. do you get what i'm driving at explain. >> yeah, it's interesting. so much of the esg conversation focuses on the large cap companies or the teslas and gms. we're seeing opportunity in their supply chains and companies with large fleets. axalta is a great example where adoption of ev will be a growth opportunity because electric motors actually require more coating insulation for stanley black & decker their automotive fastening business will grow because there's increased content potential per vehicle for evs and hybrids. so we like that about them and also that they're moving in the right direction with a forward looking outlook on management of material as well >> so i know you understood the question there which was are those companies in and of themselves esg companies or are they more the beneficiary of the

trend towards esg and electric vehicles >> arguably they are a beneficiary of the trend we don't label companies esg companies and non-esg companies. we really focus on working with companies to improve on esg. even just this morning our co-ceo and i spoke to the top 150 leaders of the company we really like, a dental company, that's committed to being best if class on esg. the more we're in front of management teams and understanding their strategies for success and building esg not only into their compliance and operations but strategy and culture, that's what we're driving towards and think it will ultimately enhance over the long term. >> i apologize for jumping in a couple of times. i hate to do that. i know you understand. thank you very much. >> thanks for having us, thank you. >> you're welcome. coming up on this special report, the esg revolution,

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investor pippa stevens is looking at the different types of energy that fit this category. as you know there's been a huge focus on clean energy in the u.s. and around the world. president biden has, of course, made climate a priority including calling for a carbon-free power grid by 2035 globally in order to hit net zero emissions by 2050 spending will need to more than triple to $4 trillion annually 2030. that's according to the international energy agency. the money would be spread over a broad range of industries and companies are already fighting for those dollars. within solar, names like first solar, sunrun, sunnova, solar edge and enphase for wind it's orsted, vestas and companies that develop and finance them like armstrong.

electric vehicles we have tesla and names like nio and the charging infrastructure around this ev buildout then in hydrogen there's plug power, ballard power, bloom energy those are some of the names. and bank of america says this is going to be an $11 trillion market by 2050 companies like plug power and ballard power have been working on hydrogen fuel cells for a decade hydrogen cells have yet to reach widespread adoption. even if a company doesn't operate squarely within clean energy, it's still going to have a score for the e with an esg. for example, is a company working to reduce emissions? there's also the long-term impact of climate change on a company. is any of its infrastructure at risk finally, there is oil and gas companies. some esg investors believe these names just don't belong in a sustainable portfolio.

others, though, say that companies that are beefing up spending around environmentally friendly policies should be rewarded so i know you have been talking about some of the challenges of esg investing and that is certainly the top of investors' minds. >> pippa, thank you very much. where can investors find value when it comes to the e in esg? our next guest is bullish on renewable energy particularly solar. we'll talk about some of the names that pippa just mentioned over my left shoulder there because gayle nicholson likes them, a senior research analyst at stevens who covers energy welcome. it's good to have you with us. let me begin with an offbeat question and maybe sort of a prickly one. can you automatically rule out a conventional energy company, a fossil fuel company, from being environmentally responsible and thereby qualifying as an esg investment what do you say? >> well, i covered the oil and

gas industry -- >> i know, that's why i ask you. >> so i actually do think the conventional energy can also be considered esg friendly. companies are making a more strident effort to reduce their greenhouse gas emissions, and some of the natural gas companies even have targets being net carbon neutral by 2025 i know that it's painted with a really negative brush. people look at oil and gas as a dirty energy source, but in the united states, we are one of the cleaner traditional producers of oil and gas in the globe, and our producers, operators in the united states, continue to make efforts to reduce their footprint and have initiatives that they are continuing to do and will continue to enhance to meet goals and so one of my companies i cover will be a net carbon neutral company by 2025. and then we have several offshore guys that are looking from the standpoint how can they use their expertise in regards

to drilling offshore to capture carbon so i do think the oil and gas industry can be still esg friendly, just in a different venue. >> i want to linger one more beat here and i mean this in all good nature. you know that the most orthodox of the environmentally responsible investors in europe would say you're all wet on this that's just not possible and, number two, while these gas companies that are going carbon neutral, they're doing so by sort of green washing themselves buying carbon credits and so on and so forth quick response to that before we move forward into some -- >> i lost sound. >> you lost -- we lost her i guess we did why don't we wait until she comes back i think -- i see her there we're going to wait just a minute but, you know, there is a much more orthodox view in europe -- >> stringent, you could call it. >> gail, you're back and i'm delighted. you got the gist of my question.

>> sorry about that. >> don't worry about it. it happens to all of us. it happens all the time. please do not worry about it you got the gist of my question? >> i did and i understand what the europeans are thinking about and one reason major european entity in oil and gas has branched out and gone into solar in regards to the investment, their own battery company, for example. i understand that's in the investor's mind-set and the thought process. i also think that you can't just paint everything with a negative one scope, one dimensional aspect and you have oil and gas still in today's society this is a source of energy, it's dirty we should embrace the fact they are making strides and efforts to be cleaner and more environmentally friendly for our universe as we set upon this energy transition as we move from more traditional sources of energy to more renewable sources like solar >> getting better can be getting good, too.

let's move on to a couple of your picks which were on the board that pippa just referred to one of your top ones is enphase. explain what it does and why you like it. another is sunrun. >> so enphase manufacture and design and enhance from a standpoint of microverter, like a sim card in a cell phone you need to convert d.c. into a.c. which is used for power in homes. these electronic lmpes are on the home and they basically enable the homeowner to utilize this technology to maximize output from their panels into their system enphase has their own battery system, their storage product that will also take the power and store it into your home so you can go off grid or utilize

your power if the power goes out which is something that consumers are looking at and needing in the standpoint of this problem and the blackouts that happen across our country so they are one of the leading micro inverter companies in the united states. the united states basically has had to do between two companies, enphase and solar edge in regards to the inverter system and enphase is high into the technology aspect from that aspect and why we like it is the standpoint we think as the consumer the u.s. continues to add residential solar to a product that they need because we have strong u.s. demand enphase will continue to maintain if not grow their market share over time they have an excellent and superior product in addition to the residential growth in the united states, the company is entering new segments including small commercial to be rolled out at the end of this year, early 2022

and you also have a portable battery product that we rolled out direct to consumer end of this year 2022 as well to increase their ability for value generation >> alas, we have to leave it there, gail. we should point out a couple of the other picks you mentioned there are interesting in part because they are domestic manufacturers, and that means that they are not subject to the environmental pollution that comes from shipping across vast oceans gail nicholson, thank you very much we'll have you back soon >> thank you, tyler. >> thank you >> really fascinating stuff. let's move on to the carbon offset programs which issue kred toit credits. a company with an emissions limit might purchase credit with someone reducing deforestation it's offset. since this allows pollution to continue, the offsets need to balance. some researchers found this isn't always the case a. review of california's carbon offset program found rampant

overcrediting, up to 30% with over $400 million. joining us is the carbon plan policy director. danny, it's good to have you do you in general think corporate america is on the right track by buying carbon offsets? are these -- to the average american citizen, are they helping to reduce fossil fuel emissions? >> i think the general answer is no as the offset market stands today. it will be part of a long-term solution to have part of the solution come from neckmechaniss but you need to invest in clean energy and strategies in agriculture. that's where to look >> why doesn't it work if i say, listen, i can't change my process near term but about buy carbon offsets, which means forests are planted. and so on net that's better for the planet than if i weren't doing so what's the problem with that

strategy >> there's nothing wrong with the theory of that the problem is the execution the claim being made is essentially a claim that's not observable no one can see what would have happened if the claim isn't made and if you look at the markets and practice, the standards set don't have particularly stringent standards. the price points are set in ways that can't encourage significant reductions and we see these problems both in the california cap and trade program that has the largest program in north america, arguably much better regulator and more strongly situated than where most of the corporate purchases are happening. there's a lack of standards and the private market is unregulated. >> now there's going to be a flood of capital into the space it sounds like there needs to be better standards immediately you've heard about the trillions that american investor base is putting into the esg movement. how can they direct that money to make sure if they want corporate america to be offsetting emissions through programs like these that it's actually happening

>> i think one of the most important things corporate america needs to grapple with is the difference between a company directly investing in clean sources of energy versus those that are making climate claims that are contingent on credits those are very different strategies and need very different oversight and robustness checks on them. the front piece of the problem here is that the entire industry is ripe with conflicts of interest, the people who issue the credits make money trading on the volume of those credits the people who make the claims and do the documentation are paid by the people who earn the credits ultimately again, we don't have any financially disinterested oversight either from the university system or from a government regulator and i think that's something that needs to be taken really seriously if the sector will move in a more positive direction >> not just that but if we were to move to a scheme more broadly, cap and trade orthopedic what have you, what would that mean for increasing the scale of these existing programs and maybe increasing the problems that go along with them

>> so there's a number of efforts right now to scale this program, to scale these markets, particularly in the voluntary sector the number one problem there are so many problems with the current status quo we need to focus on fixing the problems first before we try and scale this ten on 100 fold there aren't enough out there to satisfy the corporate demand that exists and the chicken and the egg until we start fixing the problem and set the climate benefits we won't encourage people to do the real projects that make a difference we're stuck in a loop and that needs to end >> we need to move along, but are you saying the price needs to be much, much higher? >> absolutely. the price point and the current voluntary market is one of the huge things that's holding us back >> thanks for joining to us outline the risks especially as this is more and more central. we appreciate it a lot left to discuss on this special edition of "power lunch. we've covered the e.

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welcome back i'm rahel solomon. nancy pelosi says she plans to move ahead even if republicans boycott it it's unclear if pelosi will appoint others to the panel. the white house saying it is deeply disappointed after china rejected a u.n. plan to investigate the origins of covid-19 the world health organization had proposed a probe including audits of labs and markets in wuhan, china chinese officials say the investigation isn't necessary and that some data can't be shared due to privacy concerns and in upstate new york a covid outbreak at summer camp. about 30 kids have tested positive at camp pontiac, ages 7 to 11. too young to get vaccinated. ca 65 kids are being quarantined after coming in close contact. a special edition of "power lunch" continues after this. tax-smart investing, what's new?

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welcome back, everybody. the second pillar in esg is social and it's growing in importance the specifics are pretty vague from reducing income inequality to income in racial and gender

diversity, a lot of ways to measure and interpret a company's social impact. how do you invest when 80% of the fortune 500 doesn't publicly report a demographic of the company. joining us is global head of sustainability and impact at goldman sachs. margaret, welcome. what have you developed to get at this problem? how scientific is it >> you know, you started to hit on it in your introduction i think we're in a similar place on social with esg than we were with climate and environmental it's all about data, data, data. we are hearing from our clients. they want to be invested in clients promoting diversity, in companies that treat their employees well they want to be invested in companies where the products and services they're delivering are good how do you get consistent data we're certainly making strides many of our clients want to be

leaning in to companies, for example, that have at least one woman on the board and we're also seeing that paralleled in our stewardship of activities. clients are going deeper pushing harder it's great that you have a woman on your board, but what about the gender pay gap throughout the organization what about the number of women in management positions? what we're seeing is an escalations of these conversations and a real sophistication amongst our clients and the type of data they want to see >> so is that data available to you, margaret? the stuff that the investors, the institutions want to see, can you get it from the portfolio companies you might want to invest in? >> so it's evolving. it's getting better. right now we have 90% of companies in the s&p 500 that are reporting some esg metrics now that might be, and it's unfortunate, that we tend to clump all those things together. that includes companies who are, for example, reporting on their

carbon footprint even though you could know absolutely nothing about their diversity. that 90%, i would say of that percentage, it's a pretty small portion that provides very thorough data on diversity in the workforce, but we are seeing a lot of companies commit to start releasing their eeo1 data. they've had to do it for a significant amount of time they've built practices about it what we're seeing are companies start to release that data is it the majority of the s&p 500? it's not >> as you go beyond things like board diversity, the "s" is where a lot of people get concerned about the esg movement for politicizing companies and investing and not necessarily always representing their views. how should companies deal with this in making sure that if there's one investor base that is pushing them to move in one direction perhaps engaging in social issues one way but others feel differently how do they sort of on the one hand meet the esg criteria the

investment class is pushing for without alienating part of their employee base or customer base >> you know, i think it's an excellent question and i think one of the simple ways to think about it is root it in performance. i'll make an analogy between what we're seeing in environmental and what we're seeing in social on the environmental side it's well understood at this point that by focusing on companies that understand sort of where they stand in terms of climate transition, how they need to evolve their practices, how they need to evolve their manufacturing, significant risk in terms of regulatory pressure, increased cost leaning into those companies is not just value aligned it's going to create value similarly on the social side there's been a significant amount of research a popular piece that gets cited all the time but a diverse set of perspectives tend to outperform

similarly companies who provide their employees with appropriate benefits, companies that at the most basic foundational level are avoiding human rights violations, these are things we also think drive performance i think one can step away from some of the political, use and understand that a lot in the e and equally in the s is about driving performance. >> let me ask for a quick answer, if i might is the best way to get companies to move in these directions on d, e and i to tie executives to metrics? yes or no? >> it's a great question i think it really has to be tied to business purpose. so, for example, for companies that are focused on attracting a really talented set of employees, i feel there's a bit of a war on talent these days. mille millennials, the younger generation, more so, want to work in diverse organizations where they can bring their whole

selves or benefit from the diversity of ideas they will be able to attract a broader talent there is a performance point there. >> margaret, great to see you again. we appreciate it >> thank you and still ahead, you think corporate boards are creating value for shareholders our next guest, and you know him, says think again. and that is the problem -- the problem with governance is that it really doesn't exist. we'll ck tt sunetalehaise xt icy hot. ice works fast. heat makes it last. feel the power of contrast therapy, so you can rise from pain. feel the power of contrast therapy, ♪ ♪ ♪ digital transformation has failed to take off. because it hasn't removed the endless mundane work we all hate. ♪ ♪ ♪

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welcome back to this special edition, the esg revolution. now we'll talk about "g," governance creating value and protect their interests. according to the s.e.c. governance principles include transparency, compliance, shareholder rights, and the role of the board of directors. but our next guest says most companies don't have good governance, and in the end, shareholders lose. let's bring in ta cnbc contributor. count on steve to throw a

grenade into the conversation. we welcome it and we welcome you, steve you say there really is no such thing as governance, not merely good governance. why? >> tyler, we really, as investors, are at the mercy of management and you hope they have great grounding because there is no corporate governance the role is a myth what the independent director is qualified by what the exchanges say constitutes. if you're the new york stock exchange and competing with nasdaq for a listing you're not putting onerous requirements on the board. you're saying i want to make it as easy as possible to get them on here. martin franklin has been on the network numerous times when he

ran jardon a shareholder sued, not the institutions, just a hedge fund. and what the court found, and none of this is hyperbole, none of this is fiction this is all in the court record. what the court found was that the independent director was martin franklin's closest friend for 30 years, ceos pick the directors. now when it went to court, the court ruled on behalf of the company. the merger price was $59 a share. the court, the delaware court, said to the shareholder, we're punishing you for bringing this lawsuit. we're awarding you $47 a share and then you know what they did? the judge imputed an average merger price to martin franklin and the ceo and the president averaging $74 a share. why did he do that because the deal closed in 2016. there were options, rsas, restricted stock awards that were coming due 2017/2018.

and in those rsas was another $180 million to martin franklin and $72 million to each of those two other individuals. what the court found is that the board did not even go through those employment agreements and, in fact, it was likely martin franklin and his two cronies were not entitled to them. so he said i'm add that go to the merger price i'm adding the corporate jet the board sold to you for half price. that money could have gone to shareholders and i'm adding the office you had in aspen and in boca because you got those at discounts that's one example there are many >> you talk about a few, some of them are chinese companies, acquisition of aruba >> forget the chinese companies. >> you said microsoft and nvidia might be companies that have good corporate governance but ultimately this is something the s.e.c. needs to define do you really think they might go into that area? and if they don't, what happens?

for all the esg money, do you think people who are doing this under the guise of the "g" part, the good governance, do you think that doesn't really stand up to scrutiny until or unless there's some kind of bigger s.e.c. definition that they can comply with? >> look, i met with the s.e.c. in d.c. a couple of times, had breakfast with the commissioners under the trump administration, a democrat in new york they're not doing it they can't even handle insider trading. they're just understaffed. i'll give you an example the commission i met with told me he looked at data of all the insider trading in advance of a takeover and found 801 instances, put it up on his website and sent to the s.e.c. they went through one of them. you take a company in structure, in structure hedge fund has the stock up to $54 right before the takeout. on december 1st of 2019, the

then ceo sold stock at $54 the deal was announced at $47, three days later he knew a deal was going to happen at that price, but yet he sold i can give you other instances where board members did the same thing in that five-day window when the deal -- before the deal was announced. >> i think your message would be to the community who is signing up on esg funds for an improvement in governance you'd better make sure that's something the fund is capable of doing or there's some kind of strict or specific method because otherwise so much of this behavior the s.e.c. is not going to take a look and in the meantime there's a vacuum in which somebody, something more hard edge would have to step in. >> here is the bottom line here's the bottom line, kelly. there's no protection for the shareholders the index funds are powerless. they're stuck as shareholders. the institutional shareholder services, they also have corporate services nothing happens intethere.

so you have nobody to help you there unless you happen to have a good board. >> you should set the standards and we can comply with them. i'm serious. >> we didn't get to the question of dual shareholder classes. >> i met with most of the large institutions and offered them a completely independent solution. and do you know what their reaction was we only care what the price everybody else gets. we're competing with them. we don't want to go through lawsuits >> i don't see them eagerly signing up >> steve, steve weiss, as always, great to have you with us. >> that does it for the e, the s, and the g regulating it all. could establishing rules around esg backfire and hurt the very people it's supposed to help we are going to dive into the complicated skegats ve eaof them.orha

welcome back to stable investing. he's open to establishing a framework. javier is the founder and managing partner of fenway and cnbc contributor great to have you.

welcome to the family. this is a really difficult one for regulators it's a huge problem just talking with steve weiss how should we expect to move forward on this >> it's a good question and if you stop for a microsecond what we're seeing is that the sba is at the top of the sphere of avoiding capitalism, talking about the purpose of a corporation. you have general assets moving how do you establish a regulator framework, metrics and data that's standardized. it's difficult >> so, let me ask you this is it possible, in your view to establish standards that could be applied when, for example, a fund describes itself as an environmentally responsible fund could there be standards that

the sec or the investment company institute sets up that says to describe yourself and market yourself this way, you must meet these certain criteria, or if you're going to be a socially responsible fund that you have to have this kind and you have to be willing to disclose this kind of information. is it possible to do those kinds of things? >> that is the best question you could ask and i believe that is what this whole segment you just ran just now, you heard very smart people, different very large institutions essentially tell you different definitions, different means what esg means and that is the difficult part about this but the way i think about it and many ceos, investors, society at large think about it is the fact that we're even talking about it

or if a company is polluting or fair wages and living wages for their employees and what you're seeing now there's been a lot of converging, very massive secular trends you have billing concerns for the world, no economy, no nothing. and you're dealing with this sort of in real-time one last thing is some of the people in the esg industry think about intentionality data. others think about outcomes. you can think about a company that maybe doesn't pay a fair wage but is powered by solar is that an esg company maybe. you have a lot of things being discussed now which is the fact that we're even discussing it is

the way we govern ourselves. >> a lot of people assume because of some of the discussions we've been having about standards the sec needs to come in and set some kind of standards here before we go i want to share these comments, the sec commissioner says if sec craft as standard it could be hard for us to get objective input. it's high stakes because so many people stand to benefit. any sec rules she said can create money making the opportunities and make this a particularly lucrative area which could worsen conflicts instead of resolving them. great to how far the discussion will continue thank you. final thoughts coming up final thoughts coming up next it's yet over-delivers.ing seamlessly intersect. unde,

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it's okay, you can stare. when you're a two-time gold medalist, it comes with the territory. time now for some deep thoughts a friend of mine years ago taught me if you're investing in a fund and most people who invest in environmentally responsible products are doing it via funds of one sort or another. it's important my friend used to say to know what's actually in that fund. you need to know the individual securities that are there and whether you're comfortable and whether they are by their practices meet your standard not the portfolio's standard, not the distribution executive standard, not the marketing department's standard for what an esg fund is but your standard for what qualifies that. that's the other thing i worry

about. i worry that these funds become marketing concepts more than anything else. >> i think i would say on the fee issue in a weird way if you're paying higher fees for actual research and diligence about these companies it might be paying almost nothing fees for almost nothing very interesting hour. thank for tuning in and watching the special edition of "power lunch" "closing bell" starts right now. thank you kelly and tyler and welcome to "closing bell". dow and s&p and nina dos santos in the green >> weekly jobless claims came in higher than expected this morning rising to 419,000. congress was expecting 350,000 european central bank saying it will maintain a monetary policy start. tech i