[HN Gopher] Companies with good ESG scores pollute as much as lo...
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Companies with good ESG scores pollute as much as low-rated rivals
Author : jredwards
Score : 186 points
Date : 2023-08-02 17:16 UTC (5 hours ago)
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| throwawa14223 wrote:
| As far as I can tell ESG is a huge 'begging the question'
| problem. Companies with good ESG scores do better because we
| invest in companies with good ESG scores.
| lantry wrote:
| But shouldn't the "free market" correct for this? If most
| people are putting their money into ESG but there isn't a real
| underlying performance difference, that creates an arbitrage
| opportunity for people willing to invest in non-ESG?
|
| Sadly, I can already hear the right-wing rebuttal: "the market
| isn't truly free because of the (bankers) running blackrock! we
| need govt intervention to ban ESG, then the market will be
| truly free!"
| local_issues wrote:
| The market isn't free because Vanguard and BlackRock are a
| duopoly on this. Vanguard isn't the issue though - they do
| literally nothing besides harvest tiny tiny fees at scale.
|
| BlackRock is a different story - look into their actions
| around SFH. They're not great.
| [deleted]
| Aerroon wrote:
| > _But shouldn 't the "free market" correct for this?_
|
| It probably will. It will just take many years for this
| bubble to pop.
| Ekaros wrote:
| I think we can conclude that market isn't efficient. There is
| enough of big enough players that don't even try to invest in
| optimal manner. Think of pension funds and Sovereign wealth
| funds. If those are moved to invest ESG related it will
| naturally drive ESG up.
|
| And really I think whole market is not in sensible shape in
| general and has not been for a while. Not that crash is
| imminent or can't be kicked down the road a few more times.
| gotoeleven wrote:
| They may pollute just as much but they definitely make more
| rainbow-spackled products during Pride Month which helps me feel
| good about the places I like to put my genitals.
| CameronNemo wrote:
| I think caring about ESG, and especially evaluating a company's
| governance, is important.
|
| But I don't know how much I really want BlackRock and Vanguard to
| be the ones doing the scoring...
| Xeamek wrote:
| Black Rock does NOT own the world, here is why:
|
| https://youtu.be/NzKOVVvDGhE?si=Xhog1L_VRtzMsaQ6
| fallingknife wrote:
| Correct. But they do get to vote the shares.
| Exoristos wrote:
| If you have to have YouTube explainers "proving" you're not
| evil, you're probably evil.
| zmgsabst wrote:
| I agree:
|
| - caring about your investments aligning with your values is
| good
|
| - investment firms violating civil rights laws and promoting
| fashionable bigotry using retirement funds to coerce companies
| into self-destructive behavior is bad
| legitster wrote:
| I find it hilarious the kind of conspiracy theories people lob
| at BlackRock and Vanguard.
|
| BlackRock maybe I can _maybe_ understand, but Vanguard is like
| the most straightforward boring investment company in the
| world. It 's literally a shareholder co-op for passive
| investment funds. People have no idea what they are talking
| about.
| local_issues wrote:
| My favorite Vanguard fact is their HQ. It's a shitty set of
| lowrise buildings in suburban Philly - not some massive
| highrise in Manhattan or JC. Their whole thing is automation
| and saving money.
|
| https://www.google.com/maps/place/Vanguard/@40.0513614,-75.5.
| ..
|
| BlackRock? Different story, but _Vanguard_? Comeon.
| legitster wrote:
| Honestly, I love Vanguard. Their whole shtick was to take
| the piss out of investment management - "here - we'll just
| give you a share in anything and you can keep the money".
| And I appreciate that they have stuck to their principles
| and kept the thrifty Kirkland Signature vibes.
| Cornbilly wrote:
| Tech workers (with their inflated view of their own
| intelligence) are almost always hilarious. It's half the
| reason I keep coming back to HN.
|
| If they spent the same amount of time doing research as they
| do on concocting inane conspiracies and brainless
| explanations, they may actually be as smart as they think
| themselves to be.
| CameronNemo wrote:
| You're generalizing a lot here and I take it as an insult,
| Billy.
| CameronNemo wrote:
| How is ESG passive investment?
| ke88y wrote:
| The two are totally orthogonal. Passive refers to fund
| management style, and passive management can certainly be
| based on inputs that require human judgement or decision
| making.
|
| Eg, the components of the S&P 500 are selected by
| committee, but obviously SPY is passively managed.
|
| You can have a passively managed fund that is designed to
| to track an index of companies with a certain ESG score, or
| to track an index as well as possible while excluding non-
| ESG components, for example.
| legitster wrote:
| In most cases the are not! If you buy an S&P 500 Index you
| are not buying an ESG fund at all.
|
| For a fund to be passive, all you are saying is that you
| are following pre-set rules for that fund. And there are
| any number of investment products these companies make and
| offer that use any sort of pre-set criteria.
|
| You can take a look at one of Vanguards (few) ESG index
| funds and their criteria are very clearly presented at the
| bottom of the page:
| https://investor.vanguard.com/investment-products/mutual-
| fun...
| [deleted]
| breakingrules wrote:
| [dead]
| im3w1l wrote:
| If you squint a bit, you can see some parallels to the AI
| alignment issue. Like it's clearly important to align AI, but
| what exactly should we align it to? How do we come up with one
| score that measures goodness? And it turns out that if you get
| the score just a tiny bit wrong, it can lead to big issues and
| people hating it so much they wish there wasn't any score at all.
| legitster wrote:
| Matt Levine: It's Easy to Make Oil Companies ESG:
| https://www.bloomberg.com/opinion/articles/2023-07-12/it-s-e...
| lofatdairy wrote:
| Was gonna post this. That said, this is not what Levine is
| writing about. Levine is writing about how you can restructure
| your portfolio to gain exposure to fossil fuels _without_
| lowering your ESG metrics by simply investing in companies with
| fossil fuel holdings (since then your ESG is calculated by the
| carbon emissions of the holding firms and not the assets
| themselves). Here, the authors are essentially concluding that
| ESG ratings are actually poorly correlated w/ the actual
| emissions of the firms being rated. This is probably because
| the environmental metrics of ESG scores are forward-looking
| (thus you can offset current pollution by aggressive reduction
| projections), but I'm not in this field so I don't know
| anything more.
| MostlyStable wrote:
| Also, there's evidence that moving investment from polluting to
| non-polluting industries at best has almost no impact, and
| potentially makes things worse:
|
| https://www.icpmnetwork.com/wp-content/uploads/2023/07/Count...
| hartator wrote:
| Wasn't ESG score for BP surprisingly high?
| neonate wrote:
| https://news.ycombinator.com/item?id=36975423
| grej wrote:
| I'm reminded of Goodhart's law
| https://en.wikipedia.org/wiki/Goodhart%27s_law
|
| "When a measure becomes a target, it ceases to be a good
| measure."
| XorNot wrote:
| I feel like the corrollary to that would also be that measures
| invariably become targets over a long enough timespan.
| rhaway84773 wrote:
| The whole ESG discussion is fraught with misinformation.
|
| Different ESG scores mean different things depending on what
| scoring you're looking at. So, for example, an environmentally
| focused organization may rate a company high in ESG because they
| have low emissions and/or push for green legislation.
|
| However, the more well known ESG scores that we see in the news
| are often from the financial press and are intended for
| investors, and often reflect the ESG risk exposure for the
| companies in question.
|
| This tends to have the ironic effect of making environmentally
| friendly companies have low ESG scores, and less environmentally
| friendly companies high scores.
|
| So, for example, Elon Musk complained about getting a low ESG
| risk score from S&P, but that made complete sense because Tesla
| was heavily exposed to governmental green policies. Remove CA's
| CARB credits, or various green credits and tax benefits, etc and
| Tesla's business would suffer.
|
| Exxon, OTOH, was unlikely to see any such impact leading to a
| lower ESG risk score.
|
| The key thing to understand is that there is no single ESG score.
| Every company creates different scores based on different factors
| and intended for different purposes, and their customers decide
| which ones are effective for their intended purposes and those
| scores tend to last and do well.
|
| The political backlash against ESG scores is so misplaced.
|
| It's the equivalent of a personal wealth guru who believes that
| credit cards are not good for most poor people because they
| perpetuate their poverty deciding that therefore credit ratings
| for companies are bad, because both have something to do with the
| borrowing and lending of money.
| tfandango wrote:
| ESG is tricky to talk about thanks to the politization of it. I
| work on some projects that involve ESG data and I have some
| thoughts. First there's LOTS of factors. If you bunch them all up
| into one number, it becomes meaningless as the article describes.
| I would think wiser minds would use this data to make investment
| decisions based on some specific risk, like hedging against some
| environmental disaster which may affect some companies more than
| others. Also, one thing I notice is that umbrella companies make
| ESG data complicated. Sometimes there will be data from a
| subsidiary but not the parent, how that all bubbles up is of
| note. Companies may use this to manipulate their scores. And
| quality of the data is important, it is based on research not any
| sort of testing or analytic model, so one must trust the
| researchers in this case (or not).
| yesbut wrote:
| ESG is a way for large firms to manipulate the stock prices of
| smaller firms and buy them out. That is all there is to it.
| Nobody should be fooled by this. None of these companies care
| about ESG or any of the propgandized ethics of ESG. Every one
| of these pro-ESG companies would lay off a large swath of their
| workforce if it meant higher profits. Pretty painful for the
| "S" social part of ESG.
| lesuorac wrote:
| Making an assumption that the factors into an ESG score are
| significant in how they affect a company; isn't investing into
| a company with a bad ESG sub-component(s) a good idea?
|
| You've identified what is going wrong with the company so as a
| large fund you can buy a lot of shares and push for shareholder
| votes to fix those aspects of the company and reap profits when
| the company improves?
| cryptonector wrote:
| > ESG is tricky to talk about thanks to the politization of it.
|
| "ESG is tricky to talk about because it is inherently
| political."
|
| There, I fixed it for you.
| imperfectcats wrote:
| Goodhart's Law: https://en.wikipedia.org/wiki/Goodhart%27s_law
|
| "When a measure becomes a target, it ceases to be a good
| measure"
|
| Any ESG system that uses a calculated number composed of many
| areas will quickly fall prey to Goodhart's Law. With an E, an S
| and a G to work on, the areas for change are numerous enough
| that Goodhart's Law holds even in a non-cynical world.
|
| When an edict that "We need to increase our X score this
| quarter" is handed down, the real, living people who have to
| improve the ESG rating are likely limited in what they can do.
| A combination of pre-existing contracts and commitments,
| difficulty in changing large systems and problems with multi-
| department co-ordination means that most changes will be small
| and isolated, i.e. things where one department or small team
| can implement the entire change.
| warning26 wrote:
| As you note, the politicization of it makes it difficult to
| point out the flaws without people assuming you like hate the
| environment or something. The problem is, like any score, it's
| easily gamed. That's how we get companies like ExxonMobil
| having great ESG scores.
|
| The Atlantic had a great article about it:
|
| _" When you invest in an ESG fund, you may think you're buying
| into a highly curated selection of positive-outlier companies.
| In reality, it will often look similar to an ordinary market-
| wide index fund. The 10 biggest holdings in the S&P 500 ESG
| index include Big Tech companies such as Apple, Microsoft, and
| Alphabet; big banks such as JPMorgan Chase; and, incredibly,
| ExxonMobil."_
|
| https://www.theatlantic.com/ideas/archive/2023/05/esg-woke-i...
| lowkeyoptimist wrote:
| Partially the politicization of it, but also because it is
| lumping together three issues that the society cannot even
| broadly agree one of the issues within 'ESG'. I don't think it
| is difficult to see why "ESG" is political by its nature.
| tfandango wrote:
| Thanks this is a nice way of saying what the other poster
| said :)
|
| I agree, ESG is just a bunch of numbers but if we can't agree
| on what the right output is then it's political in nature. I
| wonder if society has a bigger issue with disagreements about
| the E and S rather than the G, maybe not?
| lowkeyoptimist wrote:
| I think there is a strong case for that, companies concern
| themselves with governance constantly and I would agree
| that there is less to be concerned about there. It seems
| like governance problems have been pretty well worked out
| over time and there is a good process for that even before
| the focus on ESG.
|
| E and S are where many draw their political divides so I
| would tend to agree that is where many of the problems lie
| within ESG.
| Dig1t wrote:
| A component of ESG scores is how much you discriminate against
| white people. So of course you can have a good ESG score yet be a
| polluter.
| eli wrote:
| What specifically are you talking about?
| YSMLpT4b wrote:
| [flagged]
| Dig1t wrote:
| Here's Apple's ESG report: https://s2.q4cdn.com/470004039/fil
| es/doc_downloads/2022/08/2...
|
| In it they say: "We're making progress in increasing
| representation, and currently 50 percent of our workforce in
| the U.S. is made up of people from underrepresented
| communities."
|
| "Please see the Appendix on page 81 for more data on
| representation"
|
| Then scroll to page 81.
|
| We see that 43% of the company is white (the US is 60% white
| as of the last census, so white people are in fact
| underrepresented at Apple)
|
| 27.9% of the company is Asian
|
| 9.4% black
|
| 14.8% Hispanic
|
| So they have stated that they are working on "increasing
| representation" (hiring) all categories of people except
| white.
|
| They report these numbers because they are used to calculate
| the company's ESG score. More diversity = higher score, where
| diversity is defined as fewer white people.
|
| A higher ESG score means that ESG funds are more likely to
| invest in this company, pushing up the company's value.
|
| This is a literal economic incentive to discriminate against
| white people.
| eli wrote:
| > They report these numbers because they are used to
| calculate the company's ESG score. More diversity = higher
| score, where diversity is defined as fewer white people.
|
| Where do you see that? That's not part of the criteria for
| my Vanguard ESG fund.
| Dig1t wrote:
| "What's #ESG Score and How it is calculated"
|
| https://www.linkedin.com/pulse/whats-esg-score-how-
| calculate....
|
| "There are several organizations and rating agencies that
| calculate ESG score"
|
| "Corporate Knights: Corporate Knights is a media and
| research company that publishes an annual ranking of the
| world's most sustainable corporations. Their methodology
| evaluates companies based on a range of ESG factors,
| including carbon productivity, diversity and inclusion,
| and clean revenue."
|
| From the Corporate Knights website itself:
|
| "All publicly-traded companies with over US$1 billion in
| revenue are assessed across 25 key performance
| indicators, including % sustainable revenue, %
| sustainable investment, % taxes paid, carbon
| productivity, and racial and gender diversity."
| eli wrote:
| Corporate Knights is a free insert in newspapers that
| gives out a bunch of awards. They are not a fund manager
| and to my knowledge are not used by fund managers.
|
| In any event they're talking about board member
| diversity, not company employees.
| monero-xmr wrote:
| You need to discriminate against Asians too! Or at least the
| algorithm I've seen used by universities and DEI HR groups ends
| up discriminating against them most.
| JamesBarney wrote:
| A couple of hiring managers from oil and gas companies have
| told me there is a strong push to try not to hire white ICs if
| you can help it. This makes more sense in the context of trying
| to get a good ESG score to improve their P/E ratio.
| rayiner wrote:
| Lawyers are going to have a field day over the next few years
| litigating over these discriminatory practices in view of
| _SFFA_ and it's logical corollaries: https://s.wsj.net/public
| /resources/documents/AGLetterFortune...
|
| What's remarkable is that apparently none of these hiring
| managers and executives saw this coming. The stuff they've
| put into writing is wild. Some of the stuff, like
| aspirational racial quotas, wasn't even legal under pre-
| _SFFA_ law. I don't know who was advising these people.
| Ekaros wrote:
| Wouldn't good ESG score mean worse P/E ratio? As that would
| mean driving up the Price while Earnings might not be
| affected?
| JamesBarney wrote:
| What a better P/E ratio depends on whether you're buying or
| selling. As the CEO you want the highest price possible for
| your earnings.
| Ekaros wrote:
| Then it is probably better just to speak about straight
| up price.
| specialist wrote:
| Interesting. How's that measured, quantified?
| dang wrote:
| " _Eschew flamebait. Avoid generic tangents._ " -
| https://news.ycombinator.com/newsguidelines.html
|
| Could you please stop posting unsubstantive comments and
| flamebait? You've unfortunately been doing it repeatedly. It's
| not what this site is for, and destroys what it is for.
|
| If you wouldn't mind reviewing the site guidelines and taking
| their intended spirit more to heart, we'd be grateful.
| Dig1t wrote:
| I am sorry, I was not trying to post flamebait. I have
| provided more context with sources and an explanation of what
| I was talking about in questioning responses further down in
| the thread. I would include them in the parent comment if I
| was still able to edit it.
|
| I really don't feel like it was a harmful comment, it has net
| upvotes, the majority here seem to agree with the sentiment.
| dang wrote:
| Your comment pointed directly to race war. That's
| practically the biggest flamebait there is--especially when
| you use high-indignation, low-information phrases like "how
| much you discriminate against $group".
|
| It's important to understand the concept of "generic
| tangent" - when a thread moves away from the specifics of a
| given story toward more
| familiar/bigger/hotter/divisive/sensational things, the
| discussion is guaranteed to get more repetitive, less
| interesting, and more likely to turn into a flamewar.
|
| You can't judge these things by upvotes--sensational
| comments and flamewar comments frequently get heavily
| upvoted. This is a weakness of the upvoting system. Past
| explanations here: https://hn.algolia.com/?dateRange=all&pa
| ge=0&prefix=false&so....
| zarathustreal wrote:
| The notion of a social score is absurd. You'd first have to
| define *society*. At least here in the USA, there is no
| monolithic society. Cultures differ greatly depending on which
| state you're in and sometimes even within a state.
| kshahkshah wrote:
| That's really it, we've no great unifying force as a country
| except occasional wars which force us to innovate. Otherwise
| we're usually just riding the wave of those times and really
| prolonging it at the great expense of everyone except those
| who know the game, want to play the game, and have enough
| money to participate in the game.
| brbrodude wrote:
| Its in the words themselves, society is not culture, society
| means bonding of people/association to a thing, generally
| implied "civil society". This has nothing to do with some guy
| being a punk rocker skateboarder anarchist and the other a
| Mormon and the other a rural farm guy, that they cannot be a
| part of the same society. That's just not it.
| kornhole wrote:
| This explains why some of the most polluting and damaging
| companies can be the most woke in their training and marketing.
| This has led to a major backlash with some companies now
| advertising themselves as anti-ESG. Splitting out the scores
| that are determined by independent agencies (not fund managers)
| could maybe improve the situation, but the botched history will
| impede any efforts to reform.
| throwaway106382 wrote:
| ESG isn't about actual results, it's about controlling the
| culture.
| distant_hat wrote:
| Often companies with good ESG scores optimize for having good
| scores. Its like studying to the test and they may have
| particularly poor results outside of the test that they have
| studied for. Also, ESG is political and like all things that
| involve politics, many things that may be good for the score may
| be bad for the environment. Easiest example to see is in energy
| with things like nuclear power, and 'biomass' and coal.
| water9 wrote:
| Nuclear power if done safely is a much better alternative than
| say windmills which require extensive mining to make and kill
| thousands of birds a year.
| maigret wrote:
| You'll hate cats then
| https://www.statista.com/chart/15195/wind-turbines-are-
| not-k...
| genericone wrote:
| You'll hate statistics even more:
| https://www.npr.org/sections/13.7/2013/02/03/170851048/do-
| we...
| magicalist wrote:
| That's not statistics, though? That's "we think there are
| fewer ownerless cats in the world than the authors do".
|
| > _We don 't quarrel with the conclusion that the impact
| is big, but the numbers are informed guesswork._
|
| Meanwhile the author outright says they're writing this
| opinion piece because they don't want to see cats banned
| as pets or people going out and killing a bunch of cats.
| brickteacup wrote:
| something something when a metric becomes a target it ceases to
| be a good metric
| robocat wrote:
| A good description would be "over-fitting".
| nomel wrote:
| I'm not sure that fits, since it might imply it's not
| intentional.
|
| I think these companies are simply, explicitly, optimizing
| directly for ESG, for maximum gain, without regards to the
| "spirit" of ESG. They're rational actors. Why wouldn't they?
| Just like with taxes, it would be silly to not use the
| loopholes.
| ZeroGravitas wrote:
| When they say pollute in the headline, they mean only C02, which
| makes the headline misleading clickbait even for people who don't
| understand what the S and G in ESG stand for.
|
| > It can very well be that a high-emitting firm is very good at
| governance or employee satisfaction. There is no strong
| relationship between employee satisfaction or any of these things
| and carbon intensity," Goltz argued.
|
| > "Even the environmental pillar is pretty unrelated to carbon
| emissions," he added, with this rating partly determined by
| factors such as a company's use of water resources and waste
| management practices.
|
| It's amazing how something so utterly unremarkable has already
| inspired 4 unhinged comments.
| jmholla wrote:
| > for people who don't understand what the S and G in ESG stand
| for.
|
| They stand for Social and (corporate) Governance. I just looked
| it up myself. I wish these articles would explain that. Even
| the link on the word ESG is unhelpful.
| TylerE wrote:
| I hate hate hate how pollution has been reduced to co2 and
| nothing else. Don't have to worry about global warming if
| contaminated water and soil kill us all first.
| marcosdumay wrote:
| It's more that the other kinds of pollution are local and
| most of the world will be quick to fine you or throw you in
| jail if you start to pollute too much of them.
| b59831 wrote:
| [dead]
| mcpackieh wrote:
| Not really news is it?
|
| From two years ago:
| https://www.bloomberg.com/professional/blog/bp-esg-outlook-s...
|
| > _BP's ESG performance and outlook are bolstered by an ambitious
| net-zero emissions target from its operated upstream production
| by 2050, complemented by a tenfold surge in green spending, 50
| gigawatts of renewable-power generation by 2030 and a 40% decline
| in oil and gas volume. Ecological metrics are favorable, with
| significant improvement in the 10 years since the Deepwater
| Horizon disaster, as BP's safety and spill records are in-line
| with or above peer averages. BP's board is among the most gender-
| diverse, and it has an investor-friendly governance structure and
| best-in-class ESG disclosures._
|
| So BP, noted exploder of oil rigs in the ocean, gets a boost to
| their ESG rating by, among other things, promising to do some
| shit 30 years from now (a promise doubtlessly worth less than the
| paper it was written on), and hiring more women. What do either
| of those have to do with BP's _actual_ emissions impact?
|
| ESG exists to rehabilitate the reputations of companies like
| this.
| [deleted]
| archo wrote:
| https://archive.is/UF7dt
| filecounter wrote:
| Hard to 'believe' in ESG/DEI when the rich continue to fly
| private jets and a black scientist has never won a nobel prize.
| [deleted]
| HDThoreaun wrote:
| > a black scientist has never won a nobel prize.
|
| This is the entire point of DEI. As Kendi says, the only way to
| undo past racism and become an equal society is a period of
| short term discrimination against the privileged. Not saying I
| agree, but a Nobel is basically a career achievement and dei
| has been around for what, a decade? Would be surprising if it
| already lead to a Nobel.
| psychphysic wrote:
| ESG is a waste of time, I can't wait until this fad dies down.
| Aerroon wrote:
| When I first read about it I thought someone was playing an
| elaborate joke. It makes no sense why such ephemeral concepts
| should somehow lead to better investments. If anything, the
| entire ESG score thing seems like a scam to get people to make
| bad investments and to then bet against those investments.
| ke88y wrote:
| _> It makes no sense why such ephemeral concepts should
| somehow lead to better investments._
|
| Each component alone makes sense, if interpreted in a way
| that is consistent with shareholder capitalism.
|
| 1. Environmental. Interpreted in terms of shareholder
| capitalism, Environmental might mean something like "how well
| does this company work as a hedge against increasingly likely
| tail risks, and how resilient will it be to policy changes
| should those increasingly common tail risks result in secular
| or policy shifts".
|
| E.g., a re-insurance company that is well-positioned WRT
| coastal flooding risk but which runs all of its offices on
| artisanal coal-fired powerplants -- that are a cheap and easy
| to replace with solar if and when needed -- should have a
| higher "Environmental" score than a "net zero" re-insurance
| company that is highly exposed to coastal flooding risk.
|
| 2. Social. Interpreted in terms of shareholder capitalism,
| Social should mean that middle management is not eg over-
| paying for labor from the Good Old Boys network instead of
| taking advantage of the cheapest available labor that meets
| quality requirements.
|
| 3. Governance. Interpreted in terms of shareholder
| capitalism, Governance might mean that you don't give a
| single founder or board member the ability to over-ride the
| preferences of the majority holders of equity. Also things
| like decisions being transparent to shareholders and so on.
|
| The joke isn't ESG per se. The joke is that ESG as
| implemented makes the completely idiotic assumption that
| shareholder capitalism can do anything at all to solve
| political fissures or account for externalized costs.
| Cornbilly wrote:
| Yeah, ESG data is kinda crap at the moment.
|
| At least in the US, there isn't enough regulation to force
| companies to provide the data needed for an accurate ESG
| score. The scoring agencies are essentially just
| guesstimating based on what the companies are willing to
| expose. So, they're easily manipulated.
| Exoristos wrote:
| Wow, this is chilling.
| Aerroon wrote:
| I think even component-wise it wouldn't work well. These
| components are turned into metrics that can then be gamed.
| They obviously are gamed: the US corporate world seems to
| be chock full of token efforts like this.
|
| But if ESG did follow the points as you listed them, then
| it would probably receive a lot less political flak.
| tenpies wrote:
| I quite enjoyed it as long as you understood what it really
| meant: Energy Stops Growing.
| justrealist wrote:
| ESG is fairly obviously used to whitewash companies whose main
| product goes against ESG principles. It's a bunch of irrelevant
| window-dressing compared to the core concern of _what a company
| is selling_ yet somehow that never makes it into the ESG metric.
|
| Ex, Tesla has a terrible ESG scores, and Philip Morris has great
| ones. Is that because PM's diverse board _actually_ outweighs
| giving people cancer? No, it 's just that ESG was designed
| _explicitly to allow_ companies to hand-wave away the core issue
| that they are selling bad things.
| Zigurd wrote:
| It could be _" a bunch of,,, window-dressing compared to the
| core concern of what a company is selling yet somehow that
| never makes it into the ESG metric."_
|
| That, however, is the easy part. It's obvious BP is Big Oil. Or
| that cigarette companies sell poison. Or that gun makers'
| lobbyists have made the US a needlessly dangerous place. A gun
| made out of recycled materials is still, obviously, a gun. An
| ESG score just tells you whether they aren't racist sexist
| scum, too.
| epicureanideal wrote:
| > An ESG score just tells you whether they aren't racist
| sexist scum, too.
|
| Or that the direction of their sexism and racism goes in the
| scorer's approved direction.
| zarathustreal wrote:
| 100% this. Also, before we could even begin to score -isms
| we'd have to give them a concrete definition and that would
| obviate the need for a third-party to score them.
| zarathustreal wrote:
| If you think ESG scoring indicates anything about the culture
| of a company I've got a bridge to sell you
| Eumenes wrote:
| You don't need ESG to practice good corporate responsibility and
| governance. Carbon credits are a scam. Great interview on this
| topic by an esteemed NYU professor:
| https://www.youtube.com/watch?v=vt0C05i7pBs
| silisili wrote:
| ESG is nothing more than making companies kowtow to Blackrock.
|
| Kiss that ring, companies, and maybe they'll throw a few crumbs
| at you.
| ihsw wrote:
| [dead]
| nerdo wrote:
| Indulgences didn't signal much beyond what people paid the
| DNC^H^H^Hchurch platform either.
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