Truth and lies: separating fact from fiction

In the first episode of Rathbones’ Look forward series, broadcaster and former BBC special correspondent Allan Little discussed how social media and the spread of the concept of ‘fake news’ have combined to allow increasingly partisan views to be disseminated as ‘alternative realities’.

Fed and supported by a mutual indifference towards the truth and a fondness for manipulating facts, these new realities are fuelling extreme opinions that refuse to recognise alternative positions or accept contradictory evidence. While this by-product of the digital revolution has eroded public trust and confidence in news and information providers, Little nevertheless contends that the truth of anything is knowable if we learn to distinguish between credible and disreputable sources.

Rathbone Greenbank explains how its ethical research process ensures a robust and accurate assessment of business integrity.

A case in point

Perhaps no other subject reflects a more extreme polarisation of opinions than climate change. In our Spring 2017 Review, for example, we highlighted Donald Trump’s assertion that climate change was a hoax perpetuated by China, his determination to sever the US commitment to the Paris Agreement, and the concern felt by climate campaigners that his cabinet appointments would halt or even reverse the course of environmental reform.

Climate change deniers who discredit the scientific evidence often do so from the standpoint of political motivation: they assert that predictions of environmental catastrophe have been exaggerated to accelerate an aggressively anti-fossil fuel agenda. While this argument plays on fears of a dwindling competitive edge, there are growing signs that the private sector is recognising the connection between improved environmental stewardship and long-term business security. Since November 2016, for example, over 1,200 companies and investors have signed the Business Backs Low-Carbon USA statement, pledging their continued support for the Paris Agreement and the development of low-carbon energy and climate policies. For some, the climate change debate is an industry-crippling, economically suicidal deception; for others, it’s a way of collectively stopping a cycle of environmental abuse and bringing about better management of the planet’s natural ecosystem.

There’s certainly no shortage of supporting evidence for the latter position. Whether it’s ocean plastics, the damaging impact of fossil fuels or the depletion of natural resources, large-scale environmental damage is observable just about everywhere on Earth. Add to this the recent extreme hot weather events in Europe, Australia and Japan, or the prolonged drought in South Africa’s Western Cape that threatened to shut down Cape Town’s water supply, and there is a solid body of evidence to support the reality, rather than the fantasy, of human-induced climate change.

The need for integrity

Investors rely on accurate data from trusted sources to make informed decisions; by the same token, ESG analysts constantly endeavour to ensure that the information they use accurately reflects a company’s ethical and sustainable direction of travel – and is not an attempt at ‘greenwash’. Determining suitability for values-driven investors requires more than a surface-level understanding of company policies, practices and ESG commitments. Nothing should be accepted at face value or influenced by the claims of an opposing view, no matter how forcefully put.

Climate change aside, there are many other highly-visible examples of social inequality and environmental injustice for responsible investors to tackle that are too well-documented for claims of fabrication or excessive alarmism to win out. As Allan Little puts it, if you see it with your own eyes, you shut down the mythmakers.