• “If you are the type of person who is loth to invest in firms that pollute the planet, mistreat workers and stuff their boards with cronies, you will no doubt be aware of one of the hottest trends in finance: environmental, social and governance (esg) investing. It is an attempt to make capitalism work better and deal with the grave threat posed by climate change. It has ballooned in recent years; the titans of investment management claim that more than a third of their assets, or $35trn in total, are monitored through one esg lens or another. It is on the lips of bosses and officials everywhere.”
• “You might hope that big things would come from this. You would be wrong. Sadly those three letters have morphed into shorthand for hype and controversy. Right-wing American politicians blame a “climate cartel” for soaring prices at the petrol pump. Whistleblowers accuse the industry of “greenwashing” by deceiving its clients. Firms from Goldman Sachs to Deutsche Bank face regulatory probes. As our special report this week concludes, although esg is often well-meaning it is deeply flawed. It risks setting conflicting goals for firms, fleecing savers and distracting from the vital task of tackling climate change. It is an unholy mess that needs to be ruthlessly streamlined.”
Source : The Economist July 23rd - 29th 2022 , Page 7