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.