ESG fund managers who turned to big tech as a low-carbon, high-return bet are growing increasingly anxious over the sector’s experimentation with artificial intelligence.
Exposure to AI now represents a “short-term risk to investors”, said Marcel Stotzel, a London-based portfolio manager at Fidelity International.
Mr Stotzel said he is “worried we’ll get an AI blowback”, which he describes as a situation in which something unexpected triggers a meaningful market decline.
“It takes just one incident for something to go wrong and the material impact could be significant,” he said.
Examples that Mr Stotzel says warrant concern are fighter jets with self-learning AI systems. Fidelity is now among fund managers talking to the companies developing such technologies to discuss safety features such as a “kill switch” that can be activated if the world one day wakes up to “AI systems going rogue in a dramatic way”, he said.
The ESG investing industry may be more exposed to such risks than most, after taking to tech in a big way. Funds registered as having an outright environmental, social and good governance objective hold more tech assets than any other sector, according to Bloomberg Intelligence.
And the world’s biggest ESG exchange-traded fund is dominated by tech, led by Apple, Microsoft, Amazon and Nvidia.
Those companies are now at the forefront of developing AI. Tension over the direction the industry should take – and the speed at which it should move – recently erupted into full public view.
This month, OpenAI, the company that rocked the world a year ago with its launch of ChatGPT, fired and then rapidly rehired its chief executive, Sam Altman, setting off a frenzy of speculation.
Internal disagreements had ostensibly flared up over how ambitious OpenAI should be, in light of the potential societal risks. Mr Altman’s reinstatement puts the company on track to pursue his growth plans, including faster commercialisation of AI.
Apple has said it plans to tread cautiously in the field of AI, with chief executive Tim Cook saying in May that there are “a number of issues that need to be sorted” with the technology.
And companies, including Microsoft, Amazon, Alphabet and Meta Platforms, have agreed to enact voluntary safeguards to minimise abuse of and bias within AI.
Mr Stotzel said he is less worried about the risks stemming from small-scale AI start-ups than about those lurking in the world’s major tech companies.
“The biggest companies could do the most damage,” he said.
Other investors share those concerns. The New York City Employees’ Retirement System, one of the biggest US public pension plans, said it is “actively monitoring” how portfolio companies use AI, according to a spokeswoman for the $248 billion plan.
Generation Investment Management, the firm co-founded by former US vice president Al Gore, told clients that it Is stepping up research into generative AI and speaking daily with the companies it is invested in about the risks – as well as the opportunities – the technology represents.
And Norway’s $1.4 trillion sovereign wealth fund has told boards and companies to get serious about the “severe and uncharted” risks posed by AI.
When OpenAI’s ChatGPT was launched last November, it quickly became the fastest-growing internet application in history, reaching 13 million daily users by January, according to estimates provided by analysts at UBS Group.
Against that backdrop, tech companies developing or backing similar technology have seen their share prices soar this year.
But the absence of regulations or any meaningful historical data on how AI assets might perform over time is cause for concern, according to Crystal Geng, an ESG analyst at BNP Paribas Asset Management in Hong Kong.
“We don’t have tools or methodology to quantify the risk,” she said.
One way in which BNP tries to estimate the potential social fallout of AI is to ask portfolio companies how many job cuts may occur because of the emergence of technologies like ChatGPT.
“I haven’t seen one company that can give me a useful number,” Ms Geng said.
Jonas Kron, chief advocacy officer at Boston-based Trillium Asset Management, which helped push Apple and Meta’s Facebook to include privacy in their board charters, has been pressing tech companies to do a better job of explaining their AI work.
Earlier this year, Trillium filed a shareholder resolution with Google parent Alphabet asking it to provide more details about its AI algorithms.
Mr Kron said AI represents a governance risk for investors and noted that even insiders, including OpenAI’s Altman, have urged lawmakers to impose regulations.
The worry is that, left unfettered, AI can reinforce discrimination in areas such as health care. And aside from AI’s potential to amplify racial and gender biases, there are concerns about its propensity to enable the misuse of personal data.
Meanwhile, the number of AI incidents and controversies has increased by a factor of 26 since 2012, according to a database that tracks misuse of the technology.
Investors in Microsoft, Apple and Alphabet’s Google have filed resolutions demanding greater transparency over AI algorithms.
The AFL-CIO Equity Index Fund, which oversees $12 billion in union pensions, has asked companies including Netflix and Walt Disney to report on whether they have adopted guidelines to protect workers, customers and the public from AI harms.
Points of concern include discrimination or bias against employees, disinformation during political elections and mass layoffs resulting from automation, said Carin Zelenko, director of capital strategies at AFL-CIO in Washington.
She added that worries about AI by actors and writers in Hollywood played a role in their high-profile strikes this year.
“It just heightened the awareness of just how significant this issue is in probably every business,” she said.
Iftar programme at the Sheikh Mohammed Centre for Cultural Understanding
Established in 1998, the Sheikh Mohammed Centre for Cultural Understanding was created with a vision to teach residents about the traditions and customs of the UAE. Its motto is ‘open doors, open minds’. All year-round, visitors can sign up for a traditional Emirati breakfast, lunch or dinner meal, as well as a range of walking tours, including ones to sites such as the Jumeirah Mosque or Al Fahidi Historical Neighbourhood.
Every year during Ramadan, an iftar programme is rolled out. This allows guests to break their fast with the centre’s presenters, visit a nearby mosque and observe their guides while they pray. These events last for about two hours and are open to the public, or can be booked for a private event.
Until the end of Ramadan, the iftar events take place from 7pm until 9pm, from Saturday to Thursday. Advanced booking is required.
For more details, email openminds@cultures.ae or visit www.cultures.ae
Name: Brendalle Belaza
From: Crossing Rubber, Philippines
Arrived in the UAE: 2007
Favourite place in Abu Dhabi: NYUAD campus
Favourite photography style: Street photography
Favourite book: Harry Potter
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
The Sky Is Pink
Director: Shonali Bose
Cast: Priyanka Chopra Jonas, Farhan Akhtar, Zaira Wasim, Rohit Saraf
Three stars
COMPANY%20PROFILE
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The%20specs
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Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
How to register as a donor
1) Organ donors can register on the Hayat app, run by the Ministry of Health and Prevention
2) There are about 11,000 patients in the country in need of organ transplants
3) People must be over 21. Emiratis and residents can register.
4) The campaign uses the hashtag #donate_hope
Under 19 World Cup
Group A: India, Japan, New Zealand, Sri Lanka
Group B: Australia, England, Nigeria, West Indies
Group C: Bangladesh, Pakistan, Scotland, Zimbabwe
Group D: Afghanistan, Canada, South Africa, UAE
UAE fixtures
Saturday, January 18, v Canada
Wednesday, January 22, v Afghanistan
Saturday, January 25, v South Africa
Coming soon
Torno Subito by Massimo Bottura
When the W Dubai – The Palm hotel opens at the end of this year, one of the highlights will be Massimo Bottura’s new restaurant, Torno Subito, which promises “to take guests on a journey back to 1960s Italy”. It is the three Michelinstarred chef’s first venture in Dubai and should be every bit as ambitious as you would expect from the man whose restaurant in Italy, Osteria Francescana, was crowned number one in this year’s list of the World’s 50 Best Restaurants.
Akira Back Dubai
Another exciting opening at the W Dubai – The Palm hotel is South Korean chef Akira Back’s new restaurant, which will continue to showcase some of the finest Asian food in the world. Back, whose Seoul restaurant, Dosa, won a Michelin star last year, describes his menu as, “an innovative Japanese cuisine prepared with a Korean accent”.
Dinner by Heston Blumenthal
The highly experimental chef, whose dishes are as much about spectacle as taste, opens his first restaurant in Dubai next year. Housed at The Royal Atlantis Resort & Residences, Dinner by Heston Blumenthal will feature contemporary twists on recipes that date back to the 1300s, including goats’ milk cheesecake. Always remember with a Blumenthal dish: nothing is quite as it seems.
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
FIXTURES
Thu Mar 15 – West Indies v Afghanistan, UAE v Scotland
Fri Mar 16 – Ireland v Zimbabwe
Sun Mar 18 – Ireland v Scotland
Mon Mar 19 – West Indies v Zimbabwe
Tue Mar 20 – UAE v Afghanistan
Wed Mar 21 – West Indies v Scotland
Thu Mar 22 – UAE v Zimbabwe
Fri Mar 23 – Ireland v Afghanistan
The top two teams qualify for the World Cup
Classification matches
The top-placed side out of Papua New Guinea, Hong Kong or Nepal will be granted one-day international status. UAE and Scotland have already won ODI status, having qualified for the Super Six.
Thu Mar 15 – Netherlands v Hong Kong, PNG v Nepal
Sat Mar 17 – 7th-8th place playoff, 9th-10th place play-off
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
Ashes 2019 schedule
August 1-5: First Test, Edgbaston
August 14-18: Second Test, Lord's
August 22-26: Third Test, Headingley
September 4-8: Fourth Test, Old Trafford
September 12-16: Fifth Test, Oval
The%20specs
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