Don't Fight About Politics or Religion – or ESG – This Summer

Usually, it’s about politics and religion, which is one reason we’re advised to steer clear of these subjects. But one topic raising hackles lately is environmental, social and governance (ESG) concerns, a key element of sustainable investing.

So far this year ESG has been under attack. In the UK, there is plenty of "anti-woke" commentary. In some way this mirrors events in the US, where conservative republicans condemn ESG as "woke capitalism".

By the same token, there is plenty of concern across the board about "greenwashing", where fund managers or companies are accused of misleading customers by exaggerating their sustainability credentials. That has caused plenty of arguments. 

Many of the political attacks are ill-founded, but looking at how we deal with this conflict is instructive in helping address other conflicts that might arise at the holiday table.

Why is ESG Controversial?

Why are ESG and sustainable investing so controversial? Sustainable investing balances traditional investing with insights about how to address the world’s sustainability challenges, such as climate change and other ESG issues. It considers diverse stakeholders, not just shareholders.

There are many different kinds of sustainable investing. They can present a confusing mix of terms and approaches. And it’s controversial because it strays into people’s values. For example, many sustainable investors want to steer clear of fossil fuels because emissions cause global warming.

"Back in the 1970s, when fundamental analysis was established, we didn’t have really good ways of measuring the other kinds of resources that businesses are managing," says Sarah Newcomb, director of financial psychology at Morningstar.

"Economics tells us there are three resources: land, labour, and capital. ESG data allows us to take a look at how well businesses are handling their labour, how they’re handling their human resources and their natural resources. That is the rationale for including ESG data."

It helps people assess financial risks and increase performance.

"If someone is actually interested in making money through their investments, which most people are, then I try to focus them on that part of sustainable investing," says Leslie Samuelrich, chief executive of Green Century Funds.

"And many more people out there are looking for ways to live out their values through their investments."

Why Do We Get in Fights?

Why are the holidays such a hotbed for arguments?

Psychologists call it the preference for belief consonance. "That’s a fancy way of saying we feel more comfortable when the people around us agree with us," says Newcomb.

"That’s why we tend to get drawn in and engage with argumentative people, because on both sides, people have this deep, innate need to get the other person to agree".

But it’s hard to change anybody’s mind. That’s because of "motivated reasoning," where we begin with a conclusion in mind, which affects the arguments that we create.

That’s worsened by the bubbles and echo chambers we inhabit.

"The problem is that once we’ve made a decision, facts don’t convince us anymore. So arguing is generally not useful," says Newcomb.

"I’m of the mindset that you don’t really convince that many people," says Samuelrich. "If someone wants to disagree, I would change the subject."

Four Tips to Avoid Rows – And Maybe Learn Something

1. Talk it Through

That’s because most people haven’t made up their minds. At any table, "the smallest category [of people] are the "nos" and the "yeses", says Samuelrich. "Don’t spend any time with the nos, because that’s where you get into a fight before the pumpkin pie arrives."

2. Ask Questions

"Arguing is in my bloodstream," says Lisa Woll, executive director of US SIF, the sustainable investment trade organisation. Getting curious means you can provide facts "that will help them understand where you’re coming from".

3. Find a Connection

Woll likes to ask how people invest in their communities, a kind of sustainable investing.

"Most people support that," she says. "I always love to talk with people about that because it tells a human story in a very, very compelling way".

A former community organizer, Samuelrich knows how to corral people who disagree. She tries to find out how the individuals at the table might be connected to sustainable investing.

For example, if they care about animal welfare, Samuelrich will talk about funds that address it, as well as some of the broader options in sustainable and responsible investing.

(Samuelrich, incidentally, was one of Carl Icahn’s nominees to McDonald’s board this year as the billionaire activist asked for better treatment for pigs used in sausage).

4. Investigate Why You’re Engaging

Are you seeking to understand or simply to judge?

Newcomb says the key hear is genuine listening. "Listen to learn, not to judge, not to respond. You likely won’t come to agreement, but you may find a point of connection." But feel free to draw boundaries – if your interlocutor is making racist statements, for example.

And don’t shy away from the topic. The holidays offer a robust opportunity for people who care about sustainability to talk about concerns around climate and human rights, and racial justice, diversity, biodiversity, corporate responsibility.

"This is an opportunity for us to educate people," says Woll.

A Brief Note About Alcohol

As we all know, alcohol adds fuel to a fire – a difference of opinion can suddenly blaze into a full-blown fight. Woll gives the person a glass of water. "I have a pretty standard philosophy of not engaging in arguments with people who are clearly not 100% there with you."

Daniel Stillman, author of Good Talk: How to Design Conversations that Matter has a number of tips for avoiding a holiday dinner battle, and alcohol is at the top. First, Stillman says, drink less, so you’ll have more mental agility and emotional resources. Eat a snack beforehand if it helps calm and center you.

Four Ways to Defuse a Situation

1. 'Tell me more'

Is there a go-to phrase to dismantle an argument? Woll often says "tell me more. What’s your main argument?" She adds: "once you’ve put the burden back on the person who made the comment, sometimes it’s really helpful for people to hear themselves think through something.”

2. Show Them Respect

Newcomb doesn’t have a go-to phrase. But she asks herself "what need is this guy trying to meet by being right?" Sometimes she thinks "oh, he needs to be heard, he needs to feel respected." For Newcomb, that alters the energy of the conversation. "Could you change the topic to something that would really help them get some respect from the group? In that way, you’re shifting the energy someplace positive."

3. Slow The Conversation Down

Stillman says the space between one person talking and another is generally about 200 milliseconds. So take a breath before responding.

4. Humour is The Best Medicine

Stillman recommends dodging questions and provocations with another question, preferably humorous. If someone announces: "isn’t it a disaster what’s happening at our borders!?" Stillman likes to respond "isn’t it a disaster that I can’t have another slice of pie?"

Finally, take winning off the table, he says. "Facts don’t change minds."

This article originally appeared on our US homepage and has been further edited prior to publication in the UK