Monopolist corporate feelgood bs, basically. A moral licence to exploit, analogous to licence to pollute.[2] [3]
1. https://en.wikipedia.org/wiki/Environmental,_social,_and_cor...
2. https://www.theguardian.com/environment/2023/jan/24/carbon-o...
I think the idea sounds ok. who wouldnt want to invest in these firms? They care about the environment and society and making the world better, right? Well, the implementation is 100% BS.
Tesla was removed from the SP500 ESG index.
They get a lower score than oil and tobacco companies. Nike and many other firms are using slave labor and get higher scores. Ford and Stellantis have higher scores. The government allows for plans to select these funds for reasons that violate fiduciary duty. The majority of funds underperform the market. They use your money to reward politically aligned companies. ESG is being used to affect credit scores of these firms. Lower scores, higher cost.
If higher carbon emissions, slave labor, and political contributions is what ESG is actually about, these are tainted assets.
- https://hbr.org/2022/03/an-inconvenient-truth-about-esg-inve...
- https://reason.org/commentary/esg-investing-is-bad-for-the-e...
- https://time.com/6180638/tesla-esg-index-musk/
- https://thehill.com/opinion/4059114-a-lawsuit-waiting-to-hap...
- https://www.lw.com/admin/upload/SiteAttachments/Alert%203058...
- https://x.com/elonmusk/status/1526958110023245829?s=20
- https://www.environmental-finance.com/content/analysis/surpr...
- https://hbr.org/2022/08/esg-investing-isnt-designed-to-save-...
- https://www.leadershipnowproject.org/esg-political-influence
So who hands out these scores? And are there independent parties evaluating them or giving their own, more neutral scores?
The purpose of climate change policies is to give subsidies to voters, who are relatively more wealthy than people unlikely to vote. The purpose of ESG is to provide political cover for rapacious exploitation of workers and environments.