Artificial intelligence will boost corporate productivity and cut costs over the next five years before triggering sweeping job upheaval and an extinction event for many blue-chip companies, according to legendary venture capitalist Vinod Khosla.

“The next five years will look very decent from a corporate point of view: increasing productivity, reducing costs, increasing GDP growth, increasing abundance generally,” Khosla told the Top1000funds.com Fiduciary Investors Symposium at Stanford University.

“But in that process, well before 2030 – and people find this shocking – at least 80 per cent of jobs could be done 80 per cent by an AI. So roughly two-thirds of all jobs in the economy like the US – and I mean all jobs: farm workers, line cooks in restaurants, kitchens, home chefs.”

As an example of what’s coming, he cited a company generating $100 million in annual revenue that has already replaced its entire accounting team with one person thanks to an AI-based enterprise resource planning (ERP) system that can do what “armies of accountants” once did.

“We have companies proposing to us they do the same in HR, and every other function in customer support,” he said.

While initially positive, that wave of AI-charged productivity improvements will then usher in a decade of social disruption from 2030 to 2040, and large-scale layoffs.

“By 2035, we will have two things happen at a macroeconomic level: a hugely deflationary economy, which will violate all our assumptions because the production of goods and services will go way up, but pricing will go way down because the marginal cost of production has declined so much. Nobody, no economist, is counting on these phenomena, and that’s why I think assuming you don’t know [the future] is a far superior strategy to assuming you believe these forecasts.”

Khosla’s long track record includes investments in companies such as Google, Amazon, Square, Stripe, Affirm, and DoorDash, and his VC firm was the first to invest in OpenAI. Many of the companies he has backed have upended entire sectors of the economy and he foresees the power of AI speeding up that trend.

About 25 companies a year drop out of the Fortune 500 list – a pace that will at least “triple or quadruple by 2035”.

“It’ll be a very fast extinction rate for Fortune 500 companies because of the phenomena we talked [about] and that’s a macroeconomic trend not even remotely talked about.

“If any of you invested in the BPO industry or IT services industry, almost certainly, or customer support, most of that will disappear in the next five years, and those are very large segments today.”

While the decade ending 2040 will be disruptive, the next period will be more stable, but only if governments reassess and change the way they redistribute wealth.

“I think mostly politics will determine what policy gets instituted. That will then constrain AI country-by-country. I think all post 2040 – which is only 15 years away – you’ll see increasing abundance at a level where there’ll be ways to satisfy lots and lots of people if we sign up to redistribute wealth in particular ways, which is also a tricky issue.”

Silicon Valley: a mindset, not a place

Khosla’s broader investment view prizes improbable breakthroughs over linear forecasts, and embracing risk.

“I literally tell people, if you want to reduce risk, go to New York. I’m not going to fund somebody whose goal is to reduce risk. And most people in most parts of the world in business try and reduce risk of failure, but what they do in the process is reduce the consequences of success.

“I’d rather live in a world where I don’t mind a high probability of failure if the consequences of success are consequential – and that’s fundamentally the difference. I’ve seen many investors in the venture business in Europe and elsewhere, they’re trying to reduce risk. They turn great ideas into decent ones.”

He said the success of startups was fundamentally tied to the quality of the team rather than the initial business plan.

“I would guess less than 5 per cent of the companies five to 10 years after they started, are following the plan they presented when they first got funded. So mostly what they’re doing is iterating – tacking left, tacking right – essentially heading in the best direction of flow. That depends on the quality of the team they assemble.”

Khosla is continuing to back big ideas, including nuclear fusion.

“There is no expert who’s forecasting fusion to be proven,” he said. “So another rule I use is most people assume improbables – and this is true of your investing – are unimportant. I argue only the improbables are important… we just don’t know which improbable.”

On energy, he said China’s annual solar-cell manufacturing revenue – roughly $500 billion to $600 billion by his estimate – is now comparable to the size of the US oil industry, a scale few would have predicted a decade ago.

Khosla described Silicon Valley as a mindset where the deep sector experience of established industry executives is viewed as a handicap to innovation.

“I can’t think of a single example in 40 years where somebody who knew a space innovated in it. Could you imagine somebody from Hertz or Avis innovating on Uber or somebody from Hyatt or Hilton innovating in Airbnb, or somebody from Walmart or Target innovating like Amazon did, or somebody like Lockheed or Boeing – pick your favourite airspace company – innovating like SpaceX and Rocket Lab did?”

“I go back to if you have 1000 startups you don’t need to know the 990 that will fail. You just need to be in the curve on the 10 that succeed… and that’s where getting the right teams in these startups matters.”

Be part of the conversation next year – register now for the Fiduciary Investors Symposium Stanford 2026. Asset owners only.

Our next event is at the University of Oxford, November 4-6 2025. Register today – asset owners only.

Global investors face the difficult task of setting asset allocation in an environment where the global macro-economic backdrop suggests chaos and downside risk, but markets continue to perform strongly. 

Michael Hunstad, president of Northern Trust Asset Management, told the Fiduciary Investors Symposium at Stanford University that investors have “a very, very tough situation in front of us” to reconcile those apparently contradictory scenarios. 

“You have this strange situation of a lot of turmoil in the backdrop, both from an economic and a political perspective; but you also have this shooting-the-lights-out kind of performance in most major asset classes,” Hunstad said. 

“So how do we deal with that? Our house view is that the world currently has fat tails on both sides. Clearly, there’s a lot of downside risk, but there is an equal amount and probably even more, of an upside risk inherent to the markets as well.” 

Hunstad said that a striking characteristic of the US economy is that about 70 per cent of GDP is consumption based, which is not unusual for a developed market, but “within that 70 per cent a large portion of that consumption accrues to the top, call it, one or two quintiles of wealthiest consumers in the country”. 

Hunstad said equity markets have risen 60 per cent over the past two years; interest rates are increasing, which means interest income is on the rise; and home prices generally have increased. 

“Those top quintiles of the wealthiest consumers in the United States are wealthier than they have ever been by a huge margin,” he said. 

“Some estimates suggest between about $120 trillion in total wealth prior to Covid, now about $180 trillion, so a 50 per cent increase in total wealth. Why does that matter? Because that, in our view, is the gas tank for growth going forward.” 

Stefano Cavaglia, senior portfolio manager, total portfolio management, at the State of Wisconsin Investment Board told the symposium that “equity exposure is something you want in the long run; the question is, what do you do in the short run to mitigate any of these risks?” 

“I think it’s clear, from what we’ve observed and what we’ve heard that the so-called tail risk is more significant now,” he said. 

“Tail risk is often shunned as a good way to lose money on an ongoing basis, and we’ve actually spent quite a bit of time thinking about it.” 

Clear on risk 

Cavaglia said that to protect portfolios against tail risk, investors need to be clear on what the actual risk is that they are seeking to hedge, remember that a hedge cannot be static, and understand managers exhibit skill (or lack of it) in hedging just as much as they do in asset allocation or stock selection. 

“Are we trying to hedge an unusually large event or are we trying to hedge something in the short run, and a small event? How you structure that hedge is critical to the cost that you incur,” he said. 

“The second [point] is that these things are not set-and-forget. There’s a temptation to say, ‘Oh, I put my hedge on, and I’m done’. No, we’ve found out that, essentially, how you rebalance in the event of a drawdown is quite important.  

“And there is, across managers who do this type of work, varying skill, and that is something you can actually quantify on how they reap those extra returns and how they rebalance those losses or those gains, whichever one they may be.” 

Benoit Anne, senior managing director and head of market insights at MFS Investment Management, said “all those tensions and frictions and geopolitical risks that we’ve heard about… have two major investment implications”, the first being to underline the importance of global diversification. 

“What we’ve learned this year is the US can actually be a source of major policy uncertainty, macro-volatility, and in the context of maybe a weakening dollar, some have learned the hard way a global diversification approach makes total sense,” he said. 

“The second massive investment implication of all those tensions is that it reinforces the case for active management, all that volatility, all that tension, creates differentiation, creates divergences, unsynchronised macro cycles, and all that can actually offer opportunities for an active asset manager.” 

Cavaglia said investors can’t be certain about the future. All they can do is make as highly educated guesses as possible and remain cognisant of the fact that they do not have all the answers. 

“I want to offer, more than anything, a framework for how to think about these things,” he said. 

“Right, now, there are multiple theories about whether an asset is overvalued or undervalued, and I can come up with lots of stories, and they’re all fair. The way I’ve approached the problem over the years is [to accept] I don’t know what the theory is. 

“If I look at history, I scratch my head and I go, I can’t find a model that can explain these events, right? So then I say, okay, fine, what do I then do?” 

A century of data 

Cavaglia said there is about a century of data that describe previous “unusual” or “alternative” events, which takes investors back to “this tail question: the tail matters to different people in different ways”. 

“There’s no shortcut. I don’t have the magical model. I don’t have the magical utility function. The way we approach this is, here’s a bunch of portfolios. Here’s what can happen to you in the short run, and here’s what can happen to you in the long run. And you have to, or an investment committee or other, have to balance those trade-offs.” 

Hunstad said Northern Trust’s asset allocation is “certainly risk-on [but] it does not mean that we can be complacent about risk [by] any stretch of the imagination” 

“I would say, to Benoit’s comment, we are still very much in the diversification camp as well, recognising that there is macroeconomic inconsistency across countries that there hasn’t been in a very, very long time. We want to take advantage of that same thing as well. There’s a big, big, big, fat tail on the left, and we’re very cautious about that. We want to basically construct our portfolios to minimise that as much as we can.” 

Anne said that, at the risk of contradicting his earlier view that he did not want to be over-exposed to the US, “I strongly believe there’s a strong bullish case for the US long-term”. 

“Do I believe that the country is going through a productivity miracle? Yes, I do. I believe that the long-term growth potential in the US is higher than in any other developed markets,” he said. 

“Do I believe that maybe indeed, the valuation story in the US is actually debatable over the long term? Yes, I do. 

“There’s a strong case for long term US equity exposure. It’s just that the near term doesn’t look that great.” 

Be part of the conversation next year – register now for the Fiduciary Investors Symposium Stanford 2026. Asset owners only. 

Our next event is at the University of Oxford, November 4-6 2025. Register today – asset owners only. 

Most investors are getting their exposure to AI and other big technology themes through the public markets, and typically through passive exposure to the Magnificent Seven. But Prabhu Palani, CIO of the $10 billion City of San Jose Retirement System, says that the innovation investors should really want to tap has to come from the private markets.

“These entrepreneurs are risk takers, and those risk takers are meeting risk capital,” Palani told the Top1000funds.com Fiduciary Investors Symposium at Stanford University.

“And that magic happens here in the Valley and in other parts of the world. That incubation has to happen in startups and early-stage startups. What large companies do well is scale that innovation, right? They have deeper pockets, they have transparency, they have access to resources.

“Once that breakthrough has happened, how do you scale those businesses? Being in the public markets is all about scaling… but if you want breakthrough technology, it has to come from this ecosystem.”

About half of the plan Palani manages is in public equity; roughly half of that is in the US, and mostly passive. It’s been “automatically getting a lot of exposure” to the biggest components of the index. A quarter of the total plan is in private assets, with five per cent of that – or a quarter of that quarter –  allocated to venture capital.

“We’re here in the Valley, which we believe gives us an edge,” Palani said.

“I’m 20 minutes from Sandhill Road, and that is just tremendous. For some time there was talk that, you know, the centre of gravity is shifting away from the Valley. But come AI – it’s all here. It’s at Stanford, it’s at Berkeley, it’s at San Jose State, it’s at UC Santa Cruz and so on.”

But Nick Rubinstein, managing director at global investment firm Jennison Associates, thinks that “innovation in the public space is definitely not dead”.

“Just recently, Google released their newest imaging model,” he said.

“They call it Nano Banana, and it’s an amazing product – and suddenly, in the app store, ChatGPT dropped into the top 10 and Google’s AI system for imaging immediately popped to number one, and the order of download increases was [significant]. So I think it might be somewhat short-sighted to take all of this innovation that’s happening in the private markets and say that these companies will become the next leader.”

Jennison Associates plays almost entirely in the listed equity space, and was an early investor in Tesla, though it does meet with private companies too. But the amount of capital that the listed incumbents have is “still massive, and they are still innovating”, Rubinstein said.

“Going back to the Mag Seven, you think about what they started as and what they are now; they’ve successfully transitioned their business models one, two, even three times. And I don’t think that trend is over.”

Jackson Garton, CIO of Makena Capital, which provides investment services to asset owners including endowments, family offices, pension funds and sovereign wealth funds, says that the firm is a “big believer” in the innovation coming out of the private markets space, but there’s also the “liquidity component of the equation” to consider.  OpenAI is a $500 billion company, but it’s still relatively illiquid.

“From a plan perspective, from an asset owner perspective, that’s a big shift,” Garton said.

“Time to IPO has at least doubled over the last 10 years. The whole equation doesn’t work if you don’t get your money back, and the liquidity part of the equation, which has been stressed as of late, is something to be very cognisant of when you think about your asset allocation models and how much you can take within venture.

“If you just plug it into a traditional mean variance optimisation model, it would say put 75 to 80 per cent into venture capital. And you can’t run a plan that way.”

Be part of the conversation next year – register now for the Fiduciary Investors Symposium Stanford 2026. Asset owners only.

Our next event is at the University of Oxford, November 4-6 2025. Register today – asset owners only.

As NZ Super nuts out growing pains in processes and technology, it has made some recent decisions to change its governance route. Among them is the appointment of two co-CIOs who will lead the investment team together with collaborative decision-making and shared accountability. In a wide-ranging interview, co-CIOs Brad Dunstan and Will Goodwin tell Top1000funds.com about the fund’s “co-delegation” model, how its total portfolio approach will evolve under their leadership, and where it is hunting for new alpha sources. 

New Zealand Super has long been touted as a fund with best-practice governance and recognised globally as a strong and transparent investor. But with only 24 years under its belt, it is still a young organisation. As it nuts out growing pains in processes and technology, the fund has made some recent decisions to change its governance route. 

One of those changes is the appointment of dual decision-makers at the top of the investment team, with Brad Dunstan and Will Goodwin appointed co-chief investment officers in December 2024, which transitioned the fund to a “co-delegation” model defined by collaborative investment decision-making and shared accountability.  

“It’s a little bit in vogue,” Goodwin says in a wide-ranging interview with Top1000funds.com, citing Canada’s OTPP and the Netherlands’ APG, which both have a co-CIO structure.  

For functional reporting lines, Dunstan heads up the public markets, internal active strategies such as strategic tilting, and implementation and rebalancing, while Goodwin’s responsibilities include private markets, external mandates, direct investments, and the data analytics team. 

It is a change initiated by chief executive Jo Townsend, who has been in the role since April 2024, to ensure a diversity of investment opinions on the senior leadership level, rather than a single dominant voice.  

“We do have separate sets of delegations, and there are operations that I don’t need to be across, if he’s doing a large rebalance or some repositioning in the strategic tilting program [for example]. And likewise, he doesn’t need to be aware of what appointed managers are doing,” Goodwin says.  

Where the dual decision-making kicks in is with decisions around new manager appointments or large transactions. Goodwin says that is when both CIOs are involved from the first screen, through the confirmatory due diligence, and the final tick of approval. 

“It’s a model of being aware and being sufficiently involved across the whole portfolio but also keeping the right level of separation of power,” Goodwin says. 

It’s when there is a difference of opinion that the rubber hits the road, and one thing that both CIOs agree on is that when there is a difference of opinion, compromise is not always the best outcome.  

The CIOs are supported by contributions from the investment committee and other senior professionals, but ultimately if they can’t agree, “we do not progress”, Goodwin says.  

“We spend a lot of time communicating what we’re doing and hopefully giving the team confidence. But it’s important that they know as well that they can’t just – I’m not saying they would – curry favour with one of the CIOs and the other one will just have to suck it up,” he says. 

When disagreements arise, it’s all about having a frank conversation with each other, says Dunstan, because “agreeing not to do something is equally a decision as doing something”.  

“You actually have someone there to bounce ideas with… we get some pretty robust discussions, but I feel we get better decisions,” he says. 

Rapid growth 

The fast growth of NZ Super, with assets under management forecast to double every eight to 10 years, means a need to scale up its investment capabilities. However, Dunstan says the fund is not going on a hiring spree to expand its 79-person investment team anytime soon.  

“[We want to] make sure that the team doesn’t necessarily have to grow because the fund grows, so we are setting ourselves up to be more scalable than we have been previously,” he says, adding that the fund already has systematised and automated workflows in many public markets active strategies, from trade execution and settlement to portfolio construction.  

Another challenge that comes with growth is the need to evolve its TPA framework. The fund practices what both CIOs call “one of the purest forms” of TPA, which is defined by an unrelenting focus on total fund outcomes, integrated decision-making, more dynamic portfolio adjustments, and risk factor exposures.  

Being nimble and agile hasn’t been an issue when NZ Super was a small fund, but now it needs to have a more “pragmatic” mindset, Dunstan says.  

“A pure TPA model means that if we don’t like real estate, we’re going to own none of that… You could also have a whole lot of real estate in your portfolio, and if you think real estate is a poor investment going forward, you could sell it all,” he explains.  

“When you’re $200 billion, you can’t really say, I’m going to have $15 billion worth of real estate and no real estate team, and firing and hiring people every five years as markets move around.” 

New alpha 

Goodwin sees the diversification of alpha sources as a priority to evolve the TPA under the co-CIO leadership. Strategic tilting, which has been the fund’s biggest value-add driver over the past decade, will remain a cornerstone. But NZ Super is seeking to strengthen four other active risk pillars: beta implementation, internal credit strategies, real assets, and private equity and other alternatives.  

“If you look over the last couple of decades, a lot of larger funds than us have had strong success in infrastructure. We’ve been relatively underweight infrastructure, that’s fine, it doesn’t suit our portfolio, and we actually haven’t suffered,” he says. 

“But you also have to be aware of if we missed something… so making sure the team is thinking about that and not just resting on our laurels is really important.” 

NZ Super has added 1.57 per cent alpha per annum and returned 9.92 per annum in the past two decades, according to its annual results as at June 30, 2025. Reflecting its focus on the long term, it uniquely reports on a 20-year moving average time frame.  

The fund doesn’t disclose its actual portfolio exposures until its annual report gets published in October, but a spokesperson confirmed the fund had increased its listed equity exposure by 4 per cent since June 30, 2024, with fixed income declining slightly and all other asset classes steady.  

*Excluding strategic tilting positions 

Within strategic tilting, Dunstan says while the model has stayed consistent in the past five or six years, the assumptions that feed into the model, such as different currencies’ risk premia, are constantly reviewed. 

“The model evolves, but not a huge amount of new [long-term valuation] signals go in. It’s more scrutiny of the data and the assumptions around the existing signals… We will review the assumptions every two years,” he says.  

“The program is systematic and we don’t want to be worried about and responding to short-term volatility, because it undermines the whole basis on which the program is built,” Goodwin adds. “We want to harvest the volatility and trade off it, but not seek to change our fair value, unless something material has happened.” 

In preparing for a more complicated investment environment ahead, Dunstan says NZ Super will “prioritise what’s important to us”, including understanding macro factors and weatherproofing its portfolio accordingly, as well as adhering to its sustainability roadmap.  

“[These include understanding] how the world is changing, how we model the world, and these linkages between, say, inflation and interest rates, and do we still believe in those going forward,” he says. 

“Having a really good understanding of how our portfolio reacts in different environments will be important.” 

HESTA is laying the groundwork for a more systematic framework for using AI across its total portfolio, solidifying use cases in research, forecasting, risk management and private assets that all centre on the objective of allowing the A$98 billion ($64 billion) fund to “see risks earlier and clearer”.  

But with a huge number of potential AI applications in investment and only limited resources to implement them, HESTA is striking a careful balance of identifying areas where it can add the most value add while introducing the least complexity to its operations, says head of portfolio design Dianne Sandoval. 

“AI is not really going to give us a magic formula for higher returns, but it just gives us a better pair of glasses,” Sandoval says in an interview. “It has the ability to accelerate our understanding of factor exposures in absolute terms, but also across asset classes and really understand the liquidity and dynamics, which ultimately gives us just sharper insights on how to navigate uncertain markets.” 

Data ingestion and processing are two elements of research and forecasting where AI can make an outsized impact, she says. Some use cases at HESTA include scraping the internet for information that can inform early forecasts on job-growth data from its economists; and forecasting long-term S&P 500 returns using neural networks.  

The technology can also extract changes in soft languages in financial reports that may, for instance, indicate an improvement or deterioration in sentiment around issues such as responsible investments, and which HESTA uses to monitor companies on its watch list. 

“With research or risk analysis, with stress testing, with data mapping and cleanup, AI can do it much more efficiently because it’s repetitive and rules-based. But the judgment and analysis still sit with the team,” says Sandoval, who leads the research and asset allocation processes and oversees the rebalancing, currency overlays and portfolio risk management. 

In private markets, AI is handy in capital-call management which has taken an “egregious amount of groundwork and [been] very tedious”, she says. “Even things like cleaning up background checks and pulling data out of dusty PDFs that have forced us to do capital calls manually, AI does that much more efficiently.” 

The human touch 

But human-driven principles remain, especially in private markets. Sandoval says AI cannot yet replace investors conducting due diligence, in things such as measuring trust or the character of a management team and its ability to perform. 

Before moving to Australia, Sandoval held senior roles in some of the world’s biggest and most complex asset owners, such as CalPERS and Saudi Arabia’s PIF, and she says AI integration, like any change management, often takes time. 

“There’s obviously an upfront cost in doing this, and that’s why – in order to justify that – you really have to be thoughtful and cognisant of how I get the lowest hanging fruit,” she says.  

“And costs matter. Anytime I can reduce costs or reduce operational inefficiency, that’s a huge benefit for members as well. 

“Once you get through all of those, then you could start adding the higher value-add that takes more time, effort and institutional buy-in.” 

The ultimate item on Sandoval’s AI wish list is a structure that would allow HESTA to see its total portfolio all at once – including patterns across markets and asset classes – so that should another ‘Liberation Day’-style shock occur again, the fund can map its key positions, protect the portfolio and add some tactical positions.  

During the market turmoil in April, HESTA was able to make some trades with the liquidity it had on hand, adding to equity risk and trading FX as the Australian dollar collapsed. But there were too many moving pieces: its total fund management system, SimCorp, tracks the total portfolio exposures, but is separate from the risk- and liquidity-management systems.  

“We did that by coming together all in a room and using different systems. With AI, if all of these systems are more and more integrated, you would reduce some of the manual processes we had to do during those moments and make decisions even faster,” Sandoval says.  

“We’re not at that point, we’re mapping bits and pieces of processes, but when we can get an efficient risk map into our analysis and our key positions, as well as potential opportunities, that’s when we’ll see the whole field at once.” 

The US Department of Labor has publicly condemned the OECD for “pushing members to politicise their pension systems by integrating ESG factors unmoored from returns”.  

The Employee Benefits Security Administration, a DoL agency that oversees more than $14 trillion of the nation’s private retirement assets, launched a fresh attack on the OECD and its responsible investment principles for pension funds, declaring that it will withdraw support for such policies and that ESG is “nothing but a Marxist march through corporate culture”.  

Justin Danhof, senior policy adviser at EBSA, delivered the searing words as part of a speech outlining President Trump’s pension investing priorities to an OECD pension conference in Paris on Tuesday to a gasping crowd, one source attending the event told Top1000funds.com. 

Danhof, who is a staunch “anti-woke” crusader and previously called BlackRock, Vanguard and State Street “behemoth ideological cartel” over their ESG investment policies, said the US would not “support these policies, even tacitly”. 

“ESG, at its core, looks a lot like a Marxist march through corporate culture. What is the point of Marxism? The complete destruction of capitalism,” Danhof said. 

“If America and other OECD member companies hamstring our nations’ capital markets and pension systems with superfluous ESG costs, it only serves to benefit authoritarian regimes that do not engage in such frivolity,” he said. 

“America faulted with ESG. We are now on the mend. We invite you to join us.”  

Danhof also made a swipe at diversity, equity and inclusion which he said is a concept “that killed meritocracy leading to corporate mediocracy, which, in turn, sacrifices investment and pension returns”. 

The US DoL, under the Trump administration, is seeking to roll back a Biden-era regulation which explicitly allowed private pension funds to consider ESG factors when investing assets under the Employee Retirement Income Security Act (ERISA). The Democratic rule already received several state-level challenges, including a lawsuit from a coalition of red states led by Utah in a Texas court, which was ultimately dismissed.  

The DoL under Trump intends to finalise new rules by May 2026, which will require pension plans to invest “based only on financial considerations relevant to the risk-adjusted economic value of a particular investment, and not to advance social causes”, according to the latest EBSA regulatory agenda.  

The US pension system will focus on the “exclusive purpose” of providing benefits to plan participants, Danhof said, highlighting the limited adoption of ESG investing in corporate retirement plans (ERISA qualified funds) as a result of its “clear standards” against “politically motivated investments”.  

“That’s because ESG is not just some side-bar political or policy issue. It’s about sovereignty and security as well. Authoritarian leaders love when our member nations embrace ESG. Why? Because it lessens your prosperity and makes you less competitive,” Danhof said.  

Danhorf’s criticism of the politicisation of pension investing should be viewed in the context of US public pension plans which have elected officials as board members and over recent years have been criticised for restricting or directing pension investments. [See The politicisation of investments at US public funds] 

An OECD spokesperson declined to comment. 

In a separate speech at the OECD conference on Thursday, the US Securities and Exchange Commission (SEC) chair Paul Atkins also took aim at the European Union’s sustainability reporting requirements for corporates, describing them as “prescriptive” and “burdens” to US companies.  

“As Europe seeks to promote its capital markets by attracting more companies and investment, it should focus on reducing unnecessary reporting burdens on issuers rather than pursuing ends that are unrelated to the economic success of companies and to the well-being of their shareholders,” he said.