Discredit derivatives: Difference between revisions

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 {{image|Screenshot 2020-11-05 at 18.39.20|png|It’s the Real Thing.}}}}''JC first published this article two years before [[sustainability-linked derivatives]] emerged on the scene. Life imitates art, once again.''
-[[Discredit derivatives]] were invented by swap pioneer {{author|Hunter Barkley}} to allow [[alternative investment funds]] and others who had lazily committed to [[environmental, social, and corporate governance]] standards in their [[prospectus]]es when that seemed like a throwaway commitment that no one would check, but that, now everyone is checking it, they manifestly cannot meet, to “brown-wash” their investment portfolios.
+[[Discredit derivatives]] were invented by swap pioneer {{author|Hunter Barkley}}. They are crafted for investment funds who made lazy public commitments to [[environmental, social, and corporate governance|ESG]] back when they seemed like easy, throwaway promisers no one would check, who are now horrified by the prospect of compliance with standards they manifestly cannot meet, seeing as everyone ''is'' checking them. Discredit swaps allow these funds to “brown-wash” their investment portfolios.
 “It’s discredit avoidance, rather than evasion,” said Barkley.
 ===Prehistory===
-The funds originally regarded [[ESG]] as a cheap way of [[virtue-signalling]] to [[Ultimate client|investors]], but never thought anyone other than their clients’ [[HR]] departments would care. And who cares about HR right?<ref>Younger readers may not believe it, but there was a time when people did not realise how powerful and destructive to careers, livelihoods and common sense a modern, weaponised [[human resources]] department would become.</ref> After all, who, in her heart of hearts, ''really'' objects to massively profitable leveraged investments just because they happen to be in firearms, narcotics or [[financial weapons of mass destruction]]?
+Investment management industry originally regarded [[ESG]] as a cheap way of [[virtue-signalling]] to [[Ultimate client|investors]]. Or possibly just placating their own HR and marketing departments. And never thought anyone (other than their clients’ [[HR]] departments) would care. After all, what investor, in her heart of hearts, ''really'' objects to massively profitable leveraged investments just because they happen to be in firearms, narcotics or [[financial weapons of mass destruction]]?
 To be sure, the funds were largely right about that — no-one ''does'' care about that sort of thing in the City — but European regulators, post-Brexit, decided ''they'' did, and began holding [[hedge fund]]s to account for false advertising if they claimed the sanctimony of [[ESG]] on paper without observing it in practice. Especially British ones.