What LEGO can teach us about the folly of ESG inclusions

Posted by Anton Murray Consulting on 28 Nov, 2023

Investment Magazine

Earlier this month the world’s largest LEGO store opened in Sydney’s CBD. Visitors to the two-level 900sqm store marvelled at massive LEGO creations such as a Sydney Harbour Bridge with 549,378 bricks that took 3,630 hours to build. LEGO is the world’s largest toymaker and rated by Reptrak as the world’s most reputable company. The Danish group continues to boost sales at a time when its competitors are struggling and it is busy expanding its global manufacturing network.

LEGO also plans to spend large sums over the next few years reducing its carbon footprint through using more sustainable materials and more renewable energy. It has a target to reduce emissions by 37 per cent by 2032 and it has pledged to achieve net-zero emissions across its full supply chain by 2050. The privately-held LEGO is 75 per cent-owned by members of Denmark’s Kristiansen family and 25 per cent-owned by the LEGO Foundation (which directs its share of LEGO profits to “creating opportunities for children to learn through play”).

But what if LEGO was a publicly traded company and you were an asset owner or manager? Would you buy or hold its shares? At first blush, LEGO looks like – in more ways than one – a model company. From what you have read so far, it might seem to sit very well in, say, your ‘Global Sustainability Leaders Fund’.

The rest of this article can be found at investmentmagazine.com.au.

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