The Asymmetry of Information

By Irithmics

Posted on 1 August 2022
2 minute read

Weaponising ESG

The Asymmetry of Information - Webinar

The Asymmetry of Information - Webinar

Whether it’s health, politics or finance, information influences our decisions and choices. The asymmetry of information - when one party has different information to others - can lead to a competitive information advantage. This partly explains (1) the rise in alternative data, and (2) the abundance of quants and other technical and analytical skills within asset managers. From both of these investors seek new, differentiated sources of data from which they can generate new differentiated sources of competitive information asymmetry - alpha.

It doesn’t take long to realise that wherever you have information it’s cousins, misinformation and disinformation, are close behind. While information asymmetry can lead to a competitive information advantage, it can also lead to the weaponisation of information.

Capital markets are information markets, and with its political, social and economic ambiguities, ESG provides market participants with a wealth of information. However, as Nobel laureate Herbert A. Simon noted, “a wealth of information creates a poverty of attention”.

In this webinar, Grant Fuller discusses some reasons how and why ESG information weaponisation occurs. The webinar also discusses practical implications for corporate issuers, portfolio and risk managers, activists (both shareholder and social movements), short-sellers and regulators.

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