Separating environmental, social and governance (ESG) considerations into separate ‘buckets’ when investing is “unhelpful”, the Church of England (CofE) Pensions Board chief responsible investment officer, Adam Matthews, has stated.

Speaking at the PLSA Investment Conference 2023, Matthews described the distinction of E, S and G as unhelpful and that “we need to move beyond that”.

“Governance, we [as pension fund investors] have understood and engaged with, but then the others [environmental and social factors] are material factors within how an entity operates,” Matthews said.

He gave the example of climate changes being segregated as an ‘environmental issue – “climate is a social issue”, Matthews stated.

“It will impact the poorest, cause mass migration, intergenerational issues of justice… these are not individual issues sitting underneath buckets,” he explained.

According to Matthews, “the marketing we have had of ESG has partly done a disservice and is partly why we have had a backlash about greenwashing and the backlash that has been enabled in the US as well by presenting these as a ‘woke’ cause, while these are fundamentally core pieces of information that anyone should rationally be taking into account when making a judgement”.

“The more we can move away from [placing ESG into] silo bucketing, the better… I find that they cut across completely and we need to move to a more holistic approach”, he added.

In May last year, the CofE Pensions Board revealed in its Stewardship Report that it is around 10 years ahead on its 2050 net-zero target despite "ongoing challenges", after significantly reducing or excluding companies that are not aligned to the transition.

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