Good morning,
It’s not every day you get to talk investing with one of the biggest names in the NBA. But that’s what I gladly did on a brisk but sunny day in Milwaukee last week.
The world knows Milwaukee Bucks power forward Giannis Antetokounmpo is a force to be reckoned with on the basketball court (two consecutive NBA MVP awards, for example). However, Antetokounmpo is also focused on leveling the playing field in investing and is launching a new venture with Wall Street veteran John Koudounis, president and CEO of Calamos Investments. It’s called the Calamos Antetokounmpo Sustainable Equity Funds, a suite of ESG funds.
“We put money together and formed a separate company,” Koudounis told me in an exclusive joint interview with Antetokounmpo at the Froedtert and Medical College of Wisconsin Sports Science Center, a Bucks training facility. “We’re fifty-fifty, John and I,” Antetokounmpo added.”
“We’re doing three different funds so we can get to different levels of investors,” Koudounis said. It’s not just something the big funds can get involved with, he said.
Antetokounmpo was born and raised in Athens, Greece, after his parents moved there from Lagos, Nigeria. They worked hard to make ends meet. But his parents didn’t have access to investing and didn’t feel secure trusting others with their money, he told me. That’s one of the reasons he’s passionate about accessibility and financial literacy. (You can read more here about Antetokounmpo’s journey to investing and how the ESG fund will work.)
To say that ESG investing has picked up steam is an understatement. Global ESG assets may hit $53 trillion by 2025, according to a Bloomberg analysis. And growth in ESG investment products outpaced all other segments of the asset management industry in 2021, Fortune reported.
Meanwhile, ESG initiatives have been a frequent topic in many C-suites. And business leaders, such as Larry Fink, CEO of BlackRock, the world’s largest asset manager, have been pushing for ESG investing to go mainstream over the past few years. Bank of America CEO Brian Moynihan is another exec that’s an advocate for ESG measures. The bank ranks no. 1 on JUST Capital’s 2023 list of America’s Most JUST Companies. This is a first for Bank of America. How a company invests in the use of sustainable materials and minimizes environmental impact, providing fair wages, worker safety, and support for communities are just some of the factors under consideration to earn a spot on the list.
“For insiders, it was always clear Moynihan was one of the leaders of the movement,” Fortune’s Peter Vanham writes in The Impact Report, adding that Moynihan was the “driving force behind the ‘Stakeholder Capitalism Metrics,’ a World Economic Forum initiative aimed at rallying companies from around the world behind common ESG reporting.”
However, detractors argue that there’s a lack of standardized criteria for what makes an investment sustainable, which in turn makes it complicated to measure the ESG performance of companies and funds.
Regarding the “E” in ESG and regulation, public companies are still awaiting the passage of the U.S. Securities and Exchange Commission’s proposed mandatory climate-risk disclosure rule. Increased regulation is one of the ESG trends CFOs should watch in 2023, Meggin Thwing Eastman, managing director and global ESG editorial director at MSCI, recently told me.
“We’ve been following the fact that over the last few years attention to climate and ESG has really shifted in a lot of organizations,” Thwing Eastman said. “So it’s not just the [corporate social responsibility] people or the sustainability people or even the investor relations people—it’s the finance people.”
See you tomorrow.
Sheryl Estrada
sheryl.estrada@fortune.com
Big deal
KPMG’s 4th annual Chief Tax Officer Outlook examines how top executives are navigating the macroenvironment. The findings are based on a survey of 300 CTOs from companies across all major industries with revenue of $2 billion or more. Eighty-three percent of respondents plan to use outsourcing, co-sourcing, or managed services models in the next three years. The CTOs surveyed named ESG (38%), regulatory (36%), and geopolitical (33%) risk as the top three threats to the tax organization. Related risks—supply chain shifts (30%) and operational risk (30%) tie for the fourth spot, the report found. All have embedded tax costs that must be carefully navigated, according to KPMG. The respondents said a top agenda item is helping their companies understand the tax implications of international events and their aftereffects.
Going deeper
"Global Corporate Credit ESG Engagement Report," posted on the Harvard Law School Forum on Corporate Governance, makes the argument that asset managers who leverage their relationships with issuers are best positioned to manage ESG risks and take advantage of ESG opportunities. "Direct issuer engagement as a critical tool to mitigate portfolio risks while generating long-term sustainable returns," the authors write.
Leaderboard
Tina Hultkvist, CFO at Volvo Group, is resigning from her role, effective immediately. Hultkvist has served as CFO since March 2022 and has 25 years of experience at Volvo Group. Jan Ytterberg, previously Volvo Group CFO and currently in the role of Volvo Group senior advisor, will step in as acting CFO. Hultkvist will be available to the company during 2023 to support the transition. Volvo Group has begun the recruiting process for a successor.
Dennis L. Laraway was named CFO at the Cleveland Clinic, a health system, effective March 13. Since 2017, Laraway has served as EVP and CFO at Banner Health, a health system based in Phoenix that operates in 32 hospitals. Before that, Laraway held CFO positions at Memorial Hermann Health System in Houston; Scott & White Healthcare in Temple, Texas; St. Joseph’s Hospital & Medical Center in Phoenix; and Seton Health System, formerly a member of Ascension Health in Troy, N.Y.
Overheard
“We’re a small group of people and we need a ton more input in this system and a lot more input that goes beyond the technologies—definitely regulators and governments and everyone else.”
—Mira Murati, chief technology officer at OpenAI, the venture behind ChatGPT, told Time in an interview.
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