[HN Gopher] ESG should be boiled down to one simple measure: emi...
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ESG should be boiled down to one simple measure: emissions
Author : vinnyglennon
Score : 83 points
Date : 2022-07-27 18:55 UTC (4 hours ago)
(HTM) web link (www.economist.com)
(TXT) w3m dump (www.economist.com)
| morelisp wrote:
| How bad is the Economist's own ESG score after decades of
| laundering climate denialism?
| FabHK wrote:
| Source? I cite from Wikipedia:
|
| > The Economist supports government action on global warming.
| In 1987 the paper called for a price on carbon emissions. In
| 1997 it wrote that the United States showed 'dangerous signs'
| of using the developing world as an excuse to do nothing about
| global warming. In 1998, The Economist expressed its view that
| global warming may be a catastrophe that warrants much spending
| to reduce fossil fuels, but before this, climatologists need a
| stream of reliable data. In a December editorial before the
| 2009 United Nations Climate Change Conference, The Economist
| declared its view that the risk of catastrophic climate change
| and its effect on the economy outweighs the economic
| consequences of insuring against global warming now.
|
| https://en.wikipedia.org/wiki/The_Economist_editorial_stance...
| olivermarks wrote:
| ESG was quickly gamed by the geniuses who financialized countless
| now zombie companies. When Blackrock are pulling back on ESG
| because it's hurting profits you know the end is near.
| https://www.ft.com/content/48084b34-888a-48ff-8ff3-226f4e87a...
| verisimi wrote:
| > Three letters that won't save the planet
|
| But which are the letters that will?!
|
| That the planet needs saving is baked into whatever answer is
| about to be provided...
| axblount wrote:
| I think Tariq Fancy does a good job of breaking down why ESG and
| sustainable investing as a whole is bunk:
| https://medium.com/@sosofancy/the-secret-diary-of-a-sustaina...
|
| He also summarizes his thoughts on Doug Henwood's podcast:
| https://podcasts.google.com/feed/aHR0cHM6Ly9zaG91dC5sYm8tdGF...
| ZeroGravitas wrote:
| Does he actually have a point in amongst the rambling name
| dropping I gave up hope somewhere around the Swedish Souffle
| anecdote and abandoned the article.
| abirch wrote:
| I'm a Dalio guy. He believes in this:
| https://www.bridgewater.com/research-and-
| insights/sustainabl...
| WillPostForFood wrote:
| He believes there is a lot of money to be made, so he he
| supports it enthusiastically. It doesn't reflect on whether
| he thinks it is good for society or the planet.
| Jackpillar wrote:
| crackercrews wrote:
| Another good read on ESG's shortcomings is Woke Inc. [1]
|
| 1: https://www.amazon.com/Woke-Inc-Corporate-Americas-
| Justice/d...
| olddustytrail wrote:
| Having started to read the "breakdown" I'm unsure I want to
| listen to the podcast.
|
| Any chance of a tldr for that? The linked blog is too purile
| for my taste.
| evmar wrote:
| The Economist podcast had an episode on ESG (likely related to
| the article) and they had Tariq Fancy come on that podcast:
|
| https://www.economist.com/esg-pod
| seltzered_ wrote:
| It might be worth checking out what groups like R3.0 are doing
| around 'context based sustainability': https://www.r3-0.org/
|
| https://twitter.com/bbaue/status/1549790831107792899
| john_payette wrote:
| https://web.archive.org/web/20220721132501/https://www.econo...
| m463 wrote:
| "ESG is an acronym for E nvironmental, S ocial, and G overnance.
| ESG takes the holistic view that sustainability extends beyond
| just environmental issues."
| [deleted]
| BenSahar wrote:
| Gotta love opinion articles that cite nothing to support their
| views.
| FabHK wrote:
| The newspaper has a 10-page special report on ESG, mentioning
| sources (it does not "cite" them, because it is a newspaper,
| not an academic journal). The linked article is the one-page
| summary ("leader").
| gnarbarian wrote:
| ESG is a political compliance score. Fall out of favor with
| certain groups and your score will plummet, publicly tout an
| agenda around diversity and sustainability and your score will
| rise. The fact that Exxon (edit: oops I mean shell) has a higher
| ESG score than Tesla should be all you need to know.
| lastofthemojito wrote:
| Isn't that like complaining that Whole Foods sells cookies?
| Whole Foods positions itself as a healthier grocery store, but
| they still sell chocolate milk and ice cream and cakes and all
| sorts of products in indulgent categories. They just don't sell
| ones with high fructose corn syrup or saccharin or other
| ingredients they've deemed bad.
|
| As I understand it ESG rankings are generally done relative to
| other companies in a market segment. They aren't saying "this
| airline has a high ESG score, they must be less environmentally
| damaging than this farming company with a lower ESG score".
| They're ranking which airlines do the "good" things (for some
| value of good).
| zmgsabst wrote:
| ESG was always an excuse for misconduct:
|
| Executives and financiers took actions which harmed
| shareholders, retirement investors, etc to advance their
| personal political interests -- and then smirked, saying "we
| lost your money for your own good!"
|
| How much money have 401Ks lost on this nonsense?
|
| I'm pretty sure the number is "trillions".
| enlyth wrote:
| You vill own nothing und you vill be happy.
| Bubble_Pop_22 wrote:
| > The fact that Exxon (edit: oops I mean shell) has a higher
| ESG score than Tesla should be all you need to know.
|
| If you weren't so deeply into Musk intimate parts and repeat
| word for word his tweet you'd realize that it makes perfect
| sense.
|
| Exxon only extracts the thing, it doesn't burn it. Tesla burns
| a lot of energy to build cars.
|
| That's not to say ESG is a perfect system, perfection would be
| assigning an ESG score at the atomic level, meaning for every
| single human. At that point it wouldn't matter if you are the
| CEO of an oil company or the CEO of a coal car company which
| sells itself as a solar car company...when you board the G650ER
| you'd get the automatic Z-rating which puts you at the very
| bottom enabling peers to shame and attack you.
|
| Of course it will never happen because the elites love to
| protect their CO2 intensive lifestyle while pontificating the
| rest of us to drive electric and eat bugs.
| losteric wrote:
| > Exxon only extracts the thing, it doesn't burn it. Tesla
| burns a lot of energy to build cars.
|
| ESG supposed to provide a holistic measure of impact. Exxon
| and Tesla's ESG score would include the impact of using their
| product (ie burning Exxon's gas, driving and eventually
| disposing Tesla's cars)
| Bubble_Pop_22 wrote:
| Doesn't change the core concept of my post. The enemy of
| the environment is not Exxon or Tesla or Shell.
|
| The enemy of the environment are the CEO of Exxon, Shell
| and Tesla. Just one individual like that emits more CO2
| than a small town during their whole lifetime of traveling
| in private jets and yachts to their big mansions all over
| the globe
| gnarbarian wrote:
| it's also a way to extort money out of companies. Using slave
| labor? it's ok just donate some money here and boost your
| score.
|
| There are also companies (don't ask) I've encountered who
| appear to offer nothing but 3rd party branded kubernetes
| combined with a whole truckload of bullshit about how their
| product reduces your carbon footprint in the cloud. They reach
| out and attempt to partner with successful disadvantaged
| education programs for cheap interns and to add badges to their
| website.
|
| for the life of me I looked into what exactly they were doing
| and I couldn't figure out what they actually offered. It
| appeared to be nothing except a collection of bullshit to
| extract funding under the guise of ESG.
| ClumsyPilot wrote:
| > it's also a way to extort money out of companies. Using
| slave labor? it's ok just donate some money here and boost
| your score.
|
| That's not extortion, that's the opposite - bribery
|
| > They reach out and attempt to partner with successful
| disadvantaged education programs for cheap interns and to add
| badges to their website
|
| I did see this kind of shit once
| antasvara wrote:
| >That's not extortion, that's the opposite - bribery.
|
| I think that depends on your perspective. From the
| company's perspective, they're bribing the ratings agency
| by donating money.
|
| From the agency's perspective, they're using their rating
| as a way of coercing a company into making donations. That
| could be considered extortion, though not in the legal
| sense.
| ClumsyPilot wrote:
| I think the distinction is -> if I threaten you by
| planting drugs on you, which I am not legally meant to
| do, then I am extrorting you as I took the initiative.
|
| If you are the one that was doing something illegal to
| begin with, and bribe an official to keep it under wraps,
| then it's on you.
| antasvara wrote:
| I agree with the general sentiment here. Initiative is
| what ultimately matters.
|
| I would question which direction the initiative is with
| respect to ESG ratings. If an ESG rating agency is
| publicly or privately showing exactly how certain factors
| are weighted, I would argue that the initiative is with
| the agency.
| galdosdi wrote:
| The other really crazy thing is that, almost by definition,
| restricting your portfolio to just an index of non-ESG
| companies should outperform the market.
|
| (If that wasn't the case, it would be irrational for any
| company _not_ to be ESG compliant, right?)
|
| But such an obvious arbitrage opportunity would hardly last
| long. So I suspect for every dollar someone shifts out of the
| general market into ESG only funds, someone else shifts a
| dollar in the opposite direction, creating no net effect except
| a wealth transfer from more ethically concerned to less
| ethically concerned investors.
|
| See, extending the "Consumers will vote with their feet!"
| paradigm to the stock market is moronic. It just means "Be a
| sucker and give away your returns to anyone with less qualms."
| If a rule is worth wanting companies to follow, it needs to be
| made a law so it will apply equally to all competitors, else
| you get a classic race to the bottom.
| greeneggs wrote:
| MSCI ESG ratings:
|
| Tesla: A
|
| https://www.msci.com/our-solutions/esg-investing/esg-ratings...
|
| Exxon: BBB
|
| https://www.msci.com/our-solutions/esg-investing/esg-ratings...
| hunterb123 wrote:
| Come on now, don't cherry pick, tack on a few more for
| context:
|
| Shell: A++
|
| https://www.msci.com/our-solutions/esg-investing/esg-
| ratings...
|
| BP: A
|
| https://www.msci.com/our-solutions/esg-investing/esg-
| ratings...
|
| Marathon Oil: A
| gnarbarian wrote:
| I was referring to this which happened a few months ago:
|
| https://esgreview.net/2022/07/06/is-exxonmobil-really-
| more-e...
|
| https://seekingalpha.com/article/4516270-tesla-exxon-
| mobil-s...
| sjaak wrote:
| Shell: AA
|
| https://www.msci.com/our-solutions/esg-investing/esg-
| ratings...
|
| Higher than TSLA
| gnarbarian wrote:
| also Tesla is only average for the automotive industry
| which is mind-boggling.
| andrepd wrote:
| Well why shouldn't they be? Most major auto makers are
| phasing out development of new ICE drivetrains, and
| phasing out ICE manufacturing altogether. Meanwhile Tesla
| is certainly not without criticism.
| gnarbarian wrote:
| >plans to phase out vs >never offered and never will
| offer
|
| isn't that criticism political in nature?
| SpicyLemonZest wrote:
| YMMV on exactly what counts as "political", but I can
| easily imagine someone having an honest, good faith
| belief that investing in Toyota's transition to EVs is
| just as good for the planet as investing in Tesla's from-
| scratch EVs.
| cardanome wrote:
| A electric cars are mostly a luxury item for rich people
| to feel better. Not sure why you think Tesla should have
| a good rating.
|
| They are harmful in that they are actively distracting
| from the proper solution: that people shouldn't have
| private cars.
|
| The environmental cost to produce car, the space they
| take up in the cities, in the end private car ownership
| can not be made sustainable even if they run on electric.
| Tech wont solve the climate crisis, only societal change
| will.
| qweqwerwerwerwr wrote:
| gnarbarian wrote:
| In my mind's eye, I picture his ideal society as being
| some sort of giant human factory farm where we are all
| living in little pods and eating bugs.
|
| You still have freedom here. Comrade even though you
| cannot leave, you still have freedom here in your
| utilitarian pod. (clean luxury pods require too much
| energy and are outlawed). You have the freedom to consume
| media from either one of the state sanctioned media
| information channels. you also have the freedom to choose
| the green paste or the brown paste for dinner.
| Unfortunately our biosensors indicate You may be feeling
| some depression and anger lately, in an attempt to limit
| the fallout and spread of your toxic negativity to other
| residents your communication privileges have been revoked
| and you will be issued medication mixed into your meals
| until The behavior and bio sensors indicate positive
| levels. Though our efforts have been unable to stop
| climate change, further sacrifice is still necessary to
| minimize more environmental harm. have a blessed day!
| cardanome wrote:
| What a weird straw man.
|
| I haven't owned a car for my whole life and I am doing
| fine. It is not a big deal. Yes you need to life in a
| city with decent public transport but that is all.
|
| It is insane how people seem to be not even able to
| imagine a world that is not car-centric. It is really a
| small sacrifice that would increase the actual living
| conditions of everyone as we could have cities that are
| much more pleasant to life in.
| gnarbarian wrote:
| >Yes you need to life in a city with decent public
| transport but that is all.
|
| That is a huge ask. cities come with an incredible amount
| of baggage: higher taxes, higher cost of living, lower
| quality of life, less living space, smaller property,
| left wing politics, higher crime rates, more air
| pollution. many of us have zero interest in living in a
| big city.
|
| My personal theory is that individual liberty is
| inversely proportional to population density. wherever
| people are closer together, you end up with more rules
| because it's easier to encroach on other peoples
| wellbeing. so no thank you. I will keep my car and I will
| continue to have fires and shoot moose in my backyard.
| livueta wrote:
| Whenever I see an argument like this I'm confused by how
| hand-wavey "just achieve societal change" is. Like, sure,
| there's various issues with various technological
| approaches, but it's not as if the kind of broad social
| change that'd see private cars outlawed develops
| overnight.
|
| If anything, the last couple of decades demonstrate
| pretty convincingly and depressingly that putting
| together real momentum (read: won referendums on things
| like carbon taxes, _not_ push polls) is capital-H Hard.
| It's absolutely true that various bad actors play a
| factor in that level of difficulty, but they're not going
| to shut up and go away if we clap our hands and wish
| really hard either. Consider [1]: this is in a
| constituency electorally dominated by one of the most
| avowedly socially-liberal cities in the US and year after
| year it goes down by similar margins, and that's
| incredibly anodyne compared to straight-up getting rid of
| private cars.
|
| Conversely, supply-side energy mix changes have, over the
| same timeframe, made drastic improvements in emissions-
| per-capita without requiring much/any self-sacrifice.
| Martyrdom doesn't really scale in the same way.
|
| So: what's your plan for gaining the power required to
| implement your scenario, taking into account the apparent
| ineffectiveness of decades of messaging? "just ban the
| cars" would be sensical if you were emperor for a day,
| but failing any miracles it seems to me that the real
| distraction is this sort of utopianism.
|
| ---
|
| [1] https://ballotpedia.org/Washington_Initiative_1631,_C
| arbon_E...
| cardanome wrote:
| Transitioning from car-centric to human-centric cities is
| not about sacrifice. It is about understanding how cars
| actually keep cities from being places that could be much
| more enjoyable to live in.
|
| Having finding trouble an apartment? Without all the
| wasted space for cars we could have much denser cities.
| Problem solved!
|
| Want to have a place where children can actually play
| outside safely? Again, ban cars and you don't have to
| move to the country or suburbia.
|
| Tired of how loud cities are? Oh boy, do I have a
| solution for that.
|
| I am not preaching sacrifice, I am saying if we change
| some things we can achieve much better living conditions
| for everyone, a plus in living standard.
|
| So it is more of a matter of getting people to be
| conscious about how things actually work.
|
| So no, I am not Utopian. The point still stands that Tech
| wont solve the issues. It is sink or swim for humanity.
| bluescrn wrote:
| 'Take away cars and meat from the poors and forcibly
| relocate them into tiny pods in Mega-City One'
|
| Don't you see any problems with that plan?
| YarickR2 wrote:
| OMG . Not personal, but you're delusional and/or straight
| up lying. Denser cities are more enjoyable to live ?
| Wrong. Denser cities safer for children to play outside ?
| Wrong. Cities are loud because of cars ? With all that
| increased density you will have your surroundings much
| noisier when it hurts most - at the end of the day, when
| everyone is back from the job, and having a good time at
| home. Loud music, celebrations, brawls, arguments, etc.
| No, cramping more people in the same space will not this
| space more livable; ask Chinese .
| ZeroGravitas wrote:
| Worth noting that Washington implemented a plan that is
| basically the same as that proposal:
|
| https://ecology.wa.gov/About-us/Who-we-
| are/News/2021/Aug-6-S...
| gnarbarian wrote:
| I don't live in a city. I'm 20 miles from the nearest
| grocery store. I build real physical things with my hands
| that require physical materials like lumber to haul
| around. I can't haul 2000 lb of lumber on the back of my
| road bike.
| nemo44x wrote:
| gnarbarian wrote:
| cardanome wrote:
| What would be the issue with just having your stuff
| delivered then?
|
| And yeah every rule needs exceptions, of course there
| should be ways to rent cars for special occasion, I am
| just against general private car ownership for most
| people.
|
| Edit: General private car ownership of people living in
| the cities that is
| gnarbarian wrote:
| I think your view is skewed towards living in a city.
| your solution doesn't work for a number of reasons. if I
| wanted to go somewhere I would call an Uber and they
| would drive 20 or 30 miles to pick me up and then 40 or
| 50 miles more to drop me off and then the reverse would
| happen when I wanted to go home Rather than me just
| driving the 100 miles there and back You have additional
| overhead of somebody having to come pick me up doubling
| the miles driven. That person has to get paid which makes
| it even more expensive. And there are still cars! I'm
| just not allowed to own one. if I'm sharing a ride which
| is unlikely it will take up way more time which is also
| an expensive drag on the economy.
|
| delivery here is unreliable and expensive. if I'm picking
| out wood I have to go through dozens of boards to find
| ones that aren't fucked up. I need to find ones that are
| suitable for the job that I'm trying to use them for. A
| delivery guy would just grab whatever and throw it in the
| truck. It's not like I'm ordering an iPod off of Amazon.
| no mileage savings would be had because it is unlikely
| that anybody else would be having something delivered in
| the middle of nowhere.
| cardanome wrote:
| These are fair points. I am actually sorry that my last
| post might have been more dismissive than was called for.
|
| The thing is most people live in urban areas (and the
| general trend is for that to increase) and don't work in
| woodworking. So this caused me to be a bit dismissive as
| it doesn't really effect the main point that much.
|
| As I said, there will always be exceptions. I think the
| more productive discussion is to find what would work for
| most people, that is people in an urban setting. Then we
| can figure out how to make it work for people farther
| out.
|
| I am not sure what the best solution for your situation
| would be. I guess the biggest quick win would be just to
| get private cars out of the cities. It doesn't really
| matter if a few people farther out own cars as long as
| they are a minority. Maybe that is where electric cars
| would come in handy but then again they lack the range.
|
| Again, most people live in urban areas and prefer to live
| in urban areas and once cities become more green they
| will become even more attractive furthering urbanization.
| Whether the few people living outside own a car or not
| will hardly matter.
| baobob wrote:
| > To manufacture each EV battery, you must process
|
| > 25,000 pounds of brine for the lithium
|
| > 30,000 pounds of ore for the cobalt
|
| > 5,000 pounds of ore for the nickel, 25,000 pounds of
| ore for copper
|
| > Digging up 500,000 pounds of the earth's crust
|
| > For just - one - battery.
|
| https://twitter.com/brianroemmele/status/1503176565974216
| 710
|
| Would appreciate a fact check if this is anyone's
| business here
| sigma_ligma wrote:
| This is basically just an appeal to big numbers. "500,000
| pounds? That's a lot! ICE cars must certainly be less
| polluting. I mean, just look at the numbers: you have to
| dig up FIVE HUNDRED THOUSAND POUNDS of Earth's crust!
| FIVE HUNDRED THOUSAND! That's HALF A MILLION!"
|
| Proper comparisons look at both sides.
| Robin_Message wrote:
| My rough and ready sums put 30,000 pounds of petrol
| through the lifetime of an average ICE car.
|
| Meanwhile, I see numbers like this a lot and they always
| seem to trend high. You're talking 250 tons of ores to
| make perhaps 250-1000kg of the car; an efficiency of
| between 0.1 and 0.4 percent over some pretty
| straightforward, widely available ores. That doesn't
| really stack up with the numbers you get if you look at
| the efficiency of commercial ores for those minerals.
|
| So I think the mining is comparable between battery and
| petrol, but as others point out, you can recycle the
| battery _; the petrol had become problematic carbon
| dioxide in the atmosphere.
|
| _ If nothing else, you could grind up the batteries and
| treat them as ore for any single one of the minerals
| used, and by your numbers you 'd be way better off.
| DeRock wrote:
| > My rough and ready sums put 30,000 pounds of petrol
| through the lifetime of an average ICE car.
|
| My calculation shows ~50,000 pounds. 200,000 mile
| lifetime at 25 MPG = 8000 gallons * 6.30 pounds/gallon
| fuel density[0] = 50,400
|
| Also keep in mind that gasoline is a refined product.
|
| [0] https://en.wikipedia.org/wiki/Gasoline#Density)
| jjoonathan wrote:
| Lithium is storage. You dig it up _once_. Then you
| recharge and recharge and, eventually, recycle it. You
| never emit it into the atmosphere.
|
| Petrol is fuel. You dig it up and burn it into the
| atmosphere again and again and again for every mile you
| drive.
| gnarbarian wrote:
| They can be recycled once we have a large install base
| washbrain wrote:
| Can they? I've seen people make this claim, but I've not
| seen it actually substantiated. Who has successfully
| recycled one, what was their yield, what was the cost?
| jjoonathan wrote:
| The techniques that separate lithium from ore are extreme
| overkill for separating lithium from dead batteries.
| Recycling lithium is like mining lithium on easy mode:
| better yield and cost. If an EV can justify the raw
| resource extraction within one car lifetime -- and it
| can, handily -- it justifies the recycling. We should
| expect recycling to be (average EV lifetime) behind on
| the scale curve, though, which will make it a prime
| source for anti-EV talking points until the market
| saturates in a decade or two.
|
| > washbrain
|
| Ha, nice try.
| gnarbarian wrote:
| https://www.tesla.com/support/sustainability-recycling
| already happening
| washbrain wrote:
| Cool! What are their yields? What are their costs?
| joosters wrote:
| i.e. they can't be recycled now.
|
| We judge companies on their actions _now_ , not on what
| they _might_ do, or _might_ be possible in the future.
| gnarbarian wrote:
| as I mentioned above it's already happening
| https://www.tesla.com/support/sustainability-recycling
| already happening
| ZeroGravitas wrote:
| Shell have committed to being net zero by 2050, including
| the products they sell and have some kind of a plan in
| place to make it happen.
|
| There's bits of their plan that seem dubious to me, like
| mentions of carbon capture but overall, since I believe
| that the problem of climate change wasn't "oh no, we can't
| do this, because it's impossible" but rather "we're not
| going to do this", that commitment and plan is all I'm
| really looking for.
|
| It would be like the USA implementing a carbon tax. Is it
| instantly going to solve all the problems tomorrow? Will it
| magically fix all the previous carbon they've emitted. No,
| but it would be a really smart thing to do and just based
| on their size, would have a massive impact over time
| accelerating the transition.
| washbrain wrote:
| TSLA also has a lot of labor related discussions open about
| workplace safety and racism.
|
| (I'm not weighing in on their validity, but it's absolutely
| truthful the allegations and lawsuits are there.)
| Aarostotle wrote:
| > it's absolutely truthful the allegations and lawsuits
| are there.
|
| I want to make sure I understand you. You don't know if
| people's accusations are true, but you do know that they
| are making accusations. Is that correct?
| washbrain wrote:
| Yeah. I'm not in a position to judge the veracity of the
| allegations, but the allegations are definitely there.
| smsm42 wrote:
| You see how bizarre it gets. If you discuss workplace
| safety and racism (even without any proof of any
| wrongdoing, just talking about how to treat people better
| - and I'm sure there are always ways to treat people
| better), you get a ding on the score. If you suppress any
| discussion on the matter, you score is perfect.
|
| There's absolutely no evidence Tesla is more racist or
| unsafe place to work than Shell. If anything, Shell
| should be, in theory, more risky, safety-wise - they are
| much bigger, so more opportunity to screw up, and they do
| some things that are inherently risky, like mining and
| extraction. But I have a serious suspicion that the score
| has much less to do with safety statistics than with
| politics and donating to certain people and NGOs,
| somehow.
| washbrain wrote:
| Your hypothesis is that people are more likely to sue
| their employer if their employer is Tesla, rather then
| Shell?
| california2077 wrote:
| Maybe you get extra E points for being electric, but lose
| even more G points for being run by an extremist right-wing
| nutjob like Elon Musk.
| smsm42 wrote:
| So you're saying this score is actually how left-wing is
| the management of the company? I understand why a left-
| wing politician would eagerly embrace such score, but I
| do not see how a person not in the clutches of partisan
| fervor would want anything to do with it. In fact, a
| rational investor would keep away from such companies, as
| they would see the management sacrifice the benefit of
| their company and their client for political purposes -
| as we have already seen numerous examples. You don't
| really want to invest in a company where the management
| is willing to hurt the business to make a partisan point.
| rocqua wrote:
| On the S and the G, I could imagine Tesla doing quite bad.
| With e.g. "work fro. Hone is fine, as long as you work from
| the office at least 40 hours a week".
|
| Besides, shell is apparently so green that activists
| investors are asking it to split out the green energy part
| from the oil part. The idea of activists is that oil lovers
| undervalue shell because of the green stuff, whilst green
| lovers undervalue shell because of the oil. Hence if you
| split it the parts have a higher combined valuation. Point
| being, shell has a very significant green energy
| investment.
| mullingitover wrote:
| ESG exists because there's a market for that form of equity. That
| market is willing to buy equity that might even underperform the
| rest of the market, because it explicitly _does_ perform in the
| metric these buyers care about.
|
| There are already options if you strictly are focused on
| emissions, so I don't think this article is meaningful. The
| Economist is right-leaning and would certainly love to distract
| ESG equity buyers from their pesky concerns about social and
| corporate governance. My guess is that the target readership for
| The Economist is executives, and they would certainly love to
| make ESG scrutiny of their ballooning compensation go away.
| Quenty wrote:
| Not to comment on the rest of the comment, but apparently the
| Economist is not right leaning? Do you have a source for that?
| https://www.allsides.com/news-source/economist
| AnnikaL wrote:
| The AllSides report you linked to cites a Pew survey that
| found that "the majority of The Economist readers hold
| political values to the left-of-center," which I think might
| reflect left-leaning social values more than economics.
| AllSides themselves even say that their readers disagree:
|
| > As of August 2018, 608 AllSides readers agreed with this
| media bias rating, while 1,302 disagreed. Of those who
| disagreed, the average said The Economist has a Center media
| bias.
|
| I think that differences in economic vs. social issues as
| well as The Economist's international perspective make it
| difficult to categorize on a simple left/right metric. They
| claim[0] to support lots of positions that seem socially
| left-leaning to me as an American (drug legalization, gay
| marriage in 2004, repealing the Second Amendment), but OC
| seems to be talking more about economically left-leaning
| positions ("scrutiny of their ballooning compensation").
|
| [0] - https://www.economist.com/the-economist-
| explains/2013/09/02/...
| macinjosh wrote:
| "center" is still not right leaning. The Economist is most
| definitely not right leaning.
|
| People need to get out of their bubbles and understand
| better the full range of political beliefs and how they fit
| into that range.
| ZeroGravitas wrote:
| They're sort of sane, educated, privileged business elites
| writing for other educated priviliged business elites.
|
| To most lefties that gives a slight right-wing bias, even if
| they aren't ranting demagogues going on about foreigners.
|
| To less sane and educated right wing people, that makes them
| seem like "the liberal elite" and so they see them as left.
|
| They do seem to have pivoted towards an American audience
| somewhat more recently, which means they're sucked into the
| whole anti-woke thing, which these articles veer worrying
| close to.
| FabHK wrote:
| I find that The Economist being right-wing is an old
| prejudice.
|
| FWIW, they have endorsed the Democrat candidate in 6 of the
| last 8 US presidential elections.
|
| https://en.wikipedia.org/wiki/The_Economist_editorial_stance.
| ..
| mushufasa wrote:
| Our startup takes a new data approach to transparency and
| granularity of ESG data to sidestep a lot of the criticisms of
| greenwashing, and help people understand. I don't think
| oversimplifying to one metric is an answer for all the people who
| care about other things (e.g. data privacy, corporate corruption,
| so many other issues).
|
| We have a little description of our approach at
| https://www.yourstake.org/info/noscore-esg and we're hiring
| engineers! If you don't see something that fits you can still
| send your resume/portfolio to hiring@yourstake.org
| megaman821 wrote:
| Alarm bells start going off whenever I see objective
| measurements with subjective or moral measurements.
|
| We at Evil Corp burned down half of the Amazon rain forest for
| a golf course, but we put a BLM banner on our website...so a
| B+?
| giantg2 wrote:
| Considering almost all company's produce something to sell (even
| software or services) and those things rely on consumption and
| emissions, then shouldn't all companies be rated as net harmful
| or "C" or whatever?
| giantg2 wrote:
| Why disagree without reply?
| Maximus9000 wrote:
| I agree. Is there an emissions only ETF that I can buy into? (Not
| sure if this is mentioned in the article, it's paywalled for me)
| second_planet wrote:
| Plenty! Carbon collective takes a great approach
| https://www.carboncollective.co/portfolios
| birdmanjeremy wrote:
| I switched to Carbon Collective recently. Very happy with
| their approach and their transparency. A lot of ESGs are
| greenwashed, so it's nice putting my money somewhere I can
| actually feel OK about.
| tracker1 wrote:
| Pay-walled, so only got the summary... but even "emissions" isn't
| a simple calculation... do you include the electricity generation
| you get your power from? What about emissions on what went into
| something you buy? The mining, processing, shipping, refining,
| manufacturing and distribution of the final product, and many
| component hierarchies in play?
|
| Depending on how you look at something, getting an electric car
| is a horrible thing to do. Even then, is that better or worse
| than charging it at night from a coal power plant?
|
| The problem is, there is not simple solution, as pollution in
| general is not a simple problem. Reducing direct emissions is
| part of it... but shifting from fossil fuels with a high energy,
| low energy cost, to then use batteries, with their own
| environmental impact on material construction, refinement and
| recycle/destruction... and then getting that power (charging at
| night) from electricity that comes from a coal power plant with
| worse energy cost than the original material you were burning
| anyway... is it really a net positive?
|
| That doesn't even count a corporation's indirect influence... are
| the bulk of the workers driving an hour each way each day? Where
| does the energy at play come from.
|
| I'm a strong proponent of nuclear power in the near term... and
| getting water distribution to combine multiple sources of
| electricity and natural resources for hydrogen as a primary fuel
| source for ground vehicles.
|
| I think a lot of the woke efforts in and of themselves are short
| sighted, and not very well thought out at all though.
| WalterBright wrote:
| > but even "emissions" isn't a simple calculation
|
| Yes, it is. Tax the fuel on its carbon content at the point of
| sale of the fuel from the refinery.
| FabHK wrote:
| Do car emissions get attributed to the car manufacturer, or the
| petrol stations?
| OJFord wrote:
| Or the owner? (Which could be a company of course, in case
| you're thinking that's a cop-out.)
| kodyo wrote:
| So, "E."
| SicSemperUranus wrote:
| The article is paywalled, but this seems like a nothing burger.
|
| The point of ESG isn't to save the planet, it's to make the
| world a better place to live/work in. Union busting is bad for
| workers and therefore society at large. What's the article's
| point? That point shouldn't care about social issues? Agree to
| disagree I guess.
| JumpCrisscross wrote:
| > _What 's the article's point? That point shouldn't care
| about social issues?_
|
| The thesis is "because [ESG] lumps together a dizzying array
| of objectives, it provides no coherent guide for investors
| and firms to make the trade-offs that are inevitable in any
| society," that industry "is not being straight about
| incentives" and that "the various scoring systems have gaping
| inconsistencies and are easily gamed."
|
| Co-mingling E, S and G winds up focussing on nothing except
| making consultants rich.
| kfrzcode wrote:
| > Union busting is bad for workers and therefore society at
| large.
| bhauer wrote:
| From the article:
|
| > _It is better to focus simply on the e. Yet even that is not
| precise enough. The environment is an all-encompassing term,
| including biodiversity, water scarcity and so on. By far the
| most significant danger is from emissions, particularly those
| generated by carbon-belching industries. Put simply, the e
| should stand not for environmental factors, but for emissions
| alone._
| jballer wrote:
| ESG should be boiled down.
| MattGaiser wrote:
| Isn't a large part of the problem that you can make gains in one
| category by harming another? So to make mining more climate
| friendly, use kids in the Congo who do not require any gasoline?
| Or do it all with biodiesel so that emissions are lowered by CO2
| reuptake by the plants, but the rainforest is bulldozed?
|
| Yes, they conflict, so you want to reward companies that
| effectively manage those conflicts, not casually trade one issue
| for another.
| FabHK wrote:
| Yes, and addressed in the article:
|
| > ESG suffers from three fundamental problems. First, because
| it lumps together a dizzying array of objectives, it provides
| no coherent guide for investors and firms to make the trade-
| offs that are inevitable in any society. Elon Musk of Tesla is
| a corporate-governance nightmare, but by popularising electric
| cars he is helping tackle climate change. Closing down a
| coalmining firm is good for the climate but awful for its
| suppliers and workers. Is it really possible to build vast
| numbers of wind farms quickly without damaging local ecology?
| By suggesting that these conflicts do not exist or can be
| easily resolved, ESG fosters delusion.
| jballer wrote:
| That's the obvious criticism. Not to mention ability to
| generate a profit beyond those concerns. Proponents would argue
| that this a feature, not a bug.
| throw0101a wrote:
| I think Cullen Roche has a good take on this. For example:
|
| > _2) The secondary market is a bad place to enact change. The
| intelligent defense of ESG is "by reducing the demand for a stock
| we can increase its cost of capital and impact its operating
| performance." This is true to some degree, but I think this is
| dramatically overstated. For instance, the firms in the S &P 500
| are all large established firms that have more than enough
| capital to finance their operations. They aren't using the
| secondary equity markets to fund their operations. In fact, most
| firms have so much capital that they've been net buyers of stock
| in the last 50 years. So, this puts the cart before the horse.
| The better way to think of public companies is to think of them
| like horse betting. We can bet on the horses, but secondary
| market purchases are just private exchanges, not cash issuance to
| firms. As a result, betting on the horses doesn't change the
| outcome of the race. Similarly, our secondary market purchases
| and sales have a far smaller impact on the firm's operations than
| we might think.1_
|
| * https://www.pragcap.com/my-view-on-esg-investing/
|
| > _Look, I completely understand. I want to invest my money, beat
| the market AND do what I feel like is right. But be really
| careful buying into the narrative about how ESG funds outperform.
| In most cases they aren't being benchmarked properly and you're
| just paying higher fees to chase performance that isn't even as
| good as it's advertised as._
|
| * https://www.pragcap.com/sorry-but-your-esg-funds-probably-su...
|
| A good interview I found on the topic:
|
| > _Alex's book, "Grow the Pie: How Great Companies Deliver Both
| Purpose and Profit", was featured in the Financial Times list of
| Business Books of the Year for 2020, and he is a co-author of
| "Principles of Corporate Finance" (with Brealey, Myers, and
| Allen) for the 14th edition to be published in April 2022. He was
| named Professor of the Year by Poets & Quants in 2021._
|
| * https://rationalreminder.ca/podcast/192
|
| It may be better to do non-ESG investing and use the "excess"
| returns to fund advocacy groups that will push for political
| change in the area that you wish. All the oil and coal barons are
| funding climate change denial messaging for example.
|
| Further, if you're a stockholder of a "bad" company, you can vote
| for motions that the company to change its policies to become a
| "good" company. If you only own "good" companies, they're already
| doing the "right" thing. You want to 'reform' the ones doing the
| "wrong" thing.
| clairity wrote:
| also note that CSR (corporate social responsibility) is public
| relations, not a moral or ethical position, part and parcel to
| the term 'greenwashing'.
|
| in the same vein as the article, we should stop talking about
| climate change in favor of pollution. climate change is vague,
| pollution is not. we can see and feel the effects of pollution,
| which makes it more likely that we can create a coalition to
| address it rather than this unspecific notion of temperatures
| rising. pollution affected us yesterday, affects us today, and
| will continue to affect us into the foreseeable future. in the
| 80s this framing was used effectively against acid rain (sulfur
| dioxide) and CFC/HFCs.
|
| coal plants are among the most impactful in terms of pollution,
| so if instead of arguing about 1 or 2 or however many degrees of
| temperature rise, we pour all that effort into getting rid of
| coal plants (principally with nuclear right now, some gas at the
| margin, and renewables gradually, as storage and transmission
| tech improve), we'd be able to make meaningful impact in the next
| few years, with a byproduct of also reducing carbon emissions.
| WalterBright wrote:
| The easiest way to get rid of coal plants is to tax the carbon
| content of fuel. Natural gas has twice the energy per C atom,
| so this would naturally(!) favor gas power generation over coal
| power.
|
| Tax it, and let the market sort it out.
| tracker1 wrote:
| Agreed... in the end, the "climate change" message is really
| about pollution... so should just talk about what _can_ be its
| ' own isolated issue that everyone sees, recognizes and cares
| about.
|
| Doom spreaders sound like quacks in general. It doesn't matter
| if it's Satan or Climate change... it just breeds skepticism.
| Keep the message on message. This is why a lot of people
| stopped/don't support the EPA and the Green movements.
|
| You can see, smell, taste and feel pollution. It's bad.. and
| even then, it's really bad in places that we frankly don't
| control. And we're shipping our waste overseas to be dealt with
| corruptly or worse, not at all.
|
| In my lifetime, the Grand Canyon went from being able to see
| across well on any given day... to a haze the obscures the
| other side... rolling in from California.
| function_seven wrote:
| I sometimes toy with the idea of investing only in vice
| companies. Creating my own personal index and allocating across
| it.
|
| Sectors I'd include: Oil, gas, coal, tobacco, pharmaceuticals
| (but only makers of opiates), payday loans, gambling, etc.
|
| It's a bit sociopathic, sure. But if enough people sleep on these
| tickers, I might as well get 'em cheap and earn those dividends.
| FabHK wrote:
| The article alludes to that:
|
| > The industry's second problem is that it is not being
| straight about incentives. It claims that good behaviour is
| more lucrative for firms and investors. In fact, if you can
| stand the stigma, it is often very profitable for a business to
| externalise costs, such as pollution, onto society rather than
| bear them directly. As a result the link between virtue and
| financial outperformance is suspect.
| PaywallBuster wrote:
| Might consider too, but at a first view, looks like subpar
| performance (and Casino stocks might go down further due to
| recession)
|
| https://www.etf.com/VICE
|
| ESG Orphans https://etfdb.com/etf/ORFN/
| function_seven wrote:
| Thanks. I'm constantly surprised how unoriginal my ideas are
| :)
| dial9-1 wrote:
| ESG is a social credit score system in the making. The federal
| reserve prints out new dollars by the trillions and then uses
| their new-found fake money to manipulate the market in order to
| further their agendas
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