The Russian invasion of Ukraine is bringing the other two thirds of ESG investing into the spotlight. Everyone bullish on the concept of ESG investing has been laser focused on the environmental aspect but now we are witnessing how the Social & Governance can impact our portfolios.

Investors are now bracing and positioning themselves for the second & third order effects of the sanctions imposed on Russia. The ban from the SWIFT banking system makes it more difficult for Russia to transact their oil, but this will likely also lead to a rise in the overall price of oil, which negatively effects the US consumer.

Corporations and funds are divesting their Russian assets but since they are essentially a forced/distressed seller it is basically a certainty this will negatively impact them from a financial perspective. They're not selling due to financial liquidity needs but are seeking a different type of liquidity: Social & Governance liquidity. It is part of their fiduciary responsibility to adhere to mandates or objectives related to Social & Governance issues and the latest developments have materially altered the investment landscape.

Right now futures are selling off which makes sense, given investors do not like uncertainty, but in a way I think there are newfound reasons to be bullish on US securities. Announcements like this point to greater market concentration. If 2 of the top 10 plane manufactures are Russian based then how does this ban not positively impact the demand & pricing power of Airbus & $BA?

What other second & third order effects could arise from Russia becoming exiled from the global economy?