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ESG will create bubbles and the next Amazon or Tesla: IIF

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Tim Adams, president and CEO of Institute of International Finance, predicts that financial bubbles could form as investors try to get deals in sustainability.

Adams stated that ESG (environmental social governance) was an inevitable trend that would lead to assets far beyond their core value during Thursday’s panel discussion at CNBC’s Sustainable Future Forum.

It’s history’s lesson that there are always bubbles. Anyone who thinks we won’t have it is naïve,” he said.

There’s chaos, disruption and bubbles during times of economic or technological revolution. We see this in crypto markets right now. The internet exploded in March 2000. This was what we witnessed throughout the 1990s. The weak companies were rinsed away and the new ones rose like phoenixes. Yes, there’s going to be bubbles — there’s too much money chasing too few deals.”

Adams stated that having the right policies in place, and an efficient financial system, in case the bubble bursts would permit investment to be made in companies with potential, Adams added.

He said, “We will be intermediate across the spectrum” in terms of continuing capital to these new technologies. “Some will prove not to be viable and some will prove to be wildly viable — firms we haven’t even heard of yet will be the next AmazonOr Tesla

According to estimates, the global market for green technologies and sustainability, worth $9.57B last year is likely to grow into $41.6B by 2028. according to a July report from the market research firm Fortune Business Insights Meanwhile a report published in April by consultancy Roland BergerIt is estimated that the global revenue from environmental technology and resource efficiency will reach 9.4 trillion euro by 2030.

Fiona Frick (CEO of Unigestion), stated that investors who want to capitalize on the green revolution shouldn’t be looking at big names today.

It isn’t [about]She said that while investing in 10-20 companies who are leaders in renewable energy, you can also expand the reach of your investment by including companies that may not trade at a premium because the market is still not realizing that these companies are on a journey and will likely be visible in 3-4 years.”

“The beauty and the miracle of climate change is [it will be a]Frick stated that disruption is a factor that will affect every sector. However, each sector reacts differently to it.”

So on automobile, it will see the rise of electric vehicles, and on energy, it will change how they generate energy. [construction]It will also be about how they make a new type of cement. Each sector has a different way of doing business, and there are many ways to achieve that. It shouldn’t all be about 20 names.

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