ESG (Environmental, Social and Governance) scores are becoming ever more important in the marketing of financial products that are sold to the masses. At least US$3trn of institutional assets now track ESG scores, and the share is rising quickly.
Pure BS to charge higher fees
Why did the ESG investor cross the road?
If you’ve spent any time around the sustainable investing world, you might have heard the old joke: “What’s the easiest way to improve your company’s ESG score? Change your rating agency.”
Is it funny? That’s debatable. Is it cynical? Possibly. But is it rooted in truth? Absolutely.
esg scores are poorly correlated with each other. esg-rating firms disagree about which companies are good or bad. The Economist has compared the scores of two big esg-rating systems, updating an analysis done by the imf earlier this year (see chart). It shows at best…
View original post 80 more words