When ESG Investing Looks an Awful Lot Like Gambling

Last year, the UK’s Financial Conduct Authority issued a warning about investing apps: The “game-like elements” some of them come with — badges, points, leader boards, fun post-trade messages — might contribute to “problematic, even gambling-like, investor behavior.” There’s new legislation coming down the line, warned the regulator, so firms relying on gamification to get people trading might want to be “reviewing their products now to ensure they are fit for purpose.”

That’s about as strong an implicit threat as you get from the FCA, so I imagine there is plenty of conversation underway about what level of gamification is a good thing (it engages a new audience) and what is a bad thing (it makes that audience borrow money and use it stupidly). But if the regulator is really worried about an epidemic of gambling in the stock market, I wonder if they are looking in the right place.