Episode 52 · 2020-12-12 · 44:18 · Original in Finnish
Responsible Capitalism | Tiina Landau | Negotiator 52
Originally published as “Vastuullinen kapitalismi | Tiina Landau | Neuvottelija 52”
Tiina Landau, co-author of a book on earning excess returns through responsibility, unpacks the mechanics of responsible investing from a practitioner's standpoint. The episode opens by correcting Milton Friedman — he never said profit should be made at any cost — and moves on to Maersk's Indian shipbreaking beaches, where Norway's KLP did not sell but stayed to engage. It covers the three letters of ESG and how their order came about, the toolkit of influence from exclusion to activist funds, Stora Enso's Chinese pulp mill as a genuinely contested case, green bonds and the EU taxonomy — and Landau's daily question: is responsibility risk management or impact?
Core theses
- Selling out of a company ends your influence over it, which is why KLP stayed in Maersk rather than divesting — the episode's clearest practical argument.
- Risk management and impact are different objectives that use the same vocabulary, and a fund cannot serve both without saying which it is doing.
- Exclusion is the weakest instrument in the toolkit and the most visible one, which is why it dominates the public conversation.
- Friedman did not say profit at any cost, and the misquotation has done real work in the argument ever since.
Watch and listen
Key moments
- 00:00 — Highlights: Friedman, and the lesson of Covid
- 00:37 — Tiina Landau, practitioner and author
- 01:35 — Maersk, KLP and shipbreaking in India
- 04:23 — Friedman: does classical economics forbid responsibility
- 05:34 — Which comes first, return or impact
- 07:18 — What E, S and G mean
- 09:23 — The responsible acquisition, and deals that collapsed
- 11:40 — Exclusion, and black lists
- 12:56 — Picking the champion produces excess return
- 13:58 — Activists: Jana Partners, Apple and screen time
- 15:04 — How large institutions exert influence by asking
- 16:50 — FSC, PEFC and the power of environmental organisations
- 18:57 — Stora Enso and the Chinese pulp mill
- 20:59 — Risk management, or impact
- 23:11 — Sparkmind, and measuring impact
- 26:34 — Green bonds, and impact classifications
- 29:15 — The EU sustainability taxonomy, and a six-hundred-page report
- 30:48 — The auditor, and responsibility reporting
- 31:49 — Are small companies' resources enough
- 35:59 — Is this greenwashing
- 37:21 — The private investor's tools: MSCI and Morningstar
- 39:57 — Covid: responsible funds performed better
- 42:08 — Black swans and green swans
- 43:46 — Thanks, and the book in the show notes
Summary
Tiina Landau, co-author of a book on earning excess returns through responsibility, unpacks the mechanics of responsible investing from a practitioner’s standpoint. The episode opens by correcting Milton Friedman — he never said profit should be made at any cost — and moves on to Maersk’s Indian shipbreaking beaches, where Norway’s KLP did not sell but stayed to engage. It covers the three letters of ESG and how their order came about, the toolkit of influence from exclusion to activist funds, Stora Enso’s Chinese pulp mill as a genuinely contested case, green bonds and the EU taxonomy — and Landau’s daily question: is responsibility risk management or impact?
Selling ends the conversation
The KLP case is the best argument in the episode and it cuts against the instinct most investors have. Divesting from a company whose practice you object to removes your objection from the register along with your money. Staying in and pressing is slower, less legible and the only route that can change anything.
Two questions in one vocabulary
Is a responsibility policy managing risk to the portfolio, or changing the world? Both are defensible and they lead to different holdings. Landau’s insistence on asking it daily is the practitioner’s version of the conceptual objection EP91’s guest makes from the outside.
What Friedman actually said
Not profit at any cost. The misquotation is load-bearing in a great deal of the argument about corporate responsibility, and it is worth noting that both this episode and EP91, which disagree about nearly everything else, begin by correcting it.
Watch
The recording lives on the Neuvottelija channel: Vastuullinen kapitalismi | Tiina Landau | Neuvottelija 52. A Finnish edition of this episode is published at www.neuvottelija.fi.
In depth
The Neuvottelija AI editions carry a long-form write-up of this episode: English · suomeksi.
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People and topics
Guests: Tiina Landau
Topics: Investing & Markets Ownership, Capital & Tax Leadership & Governance