Billionaire investor Bill Ackman is fully on board with the philosophy that big business and capitalism in general can be vehicles for the improvement of societies. He is one who believes that sustainability and societal impact of an investment are factors to be considered in the business moves made by a company. This is known as environmental, social, and governance (ESG) management. And Mr. Ackman believes that his Pershing Square Capital should engage in ESG.
In a letter to shareholders released on Monday Ackman wrote, “With the benefit of substantial philanthropic and investing experience, I have come to believe that capitalism is likely the most powerful potential force for good in addressing society’s long-term problems. A successful business operating ethically and sustainably can create many thousands of high-paying jobs, deliver high long-term returns for pensioners, long-term savers and other investors, and provide goods and services that materially increase its customers’ quality of life, broadly defined. That said, capitalism is far from perfect.”
Bill Ackman also sees business as a vehicle for dealing with environmental, social, and governance (ESG) issues.
“We believe that good ESG practices are fundamentally aligned with running a successful business. As consumers and other corporate customers have become increasingly educated on matters of ESG, they have begun to avoid companies that contribute to climate change or do not treat their employees well, while rewarding companies with their business that have sustainable and responsible policies,” added Ackman. “Similarly, a growing number of investors have become increasingly concerned about the risks of companies which do not take ESG issues seriously. These investors avoid investing in companies which do not meet high ESG standards, reducing the valuations and investment returns of these businesses, negatively impacting their cost of capital.”
Unfortunately for Pershing Square Capital investors, Bill Ackman also said that a deal has not yet been reached for its special purpose acquisition company (SPAC) Pershing Square Tontine Holding. Ackman had previously hoped to close a deal for its sale by the end of Quarter 1 2021. The company is reportedly worth $4 billion.
“While we previously believed that we would be able to announce a potential transaction by the end of this quarter, we will not be in a position to do so,” wrote Ackman in his letter.