Companies with good ESG scores pollute as much as low-rated rivals • Hacker News Board

Re: Companies with good ESG scores pollute as much as low-rated rivals

#111

Post by Galanwe » Thu, Aug 03, 2023, 12:36 AM UTC

lesuorac wrote: post #46

tfandango wrote: post #10

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 a…

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?

> isn't investing into a company with a bad ESG sub-component(s) a good idea?

Yes, that is the paradox of the ESG finance trend.

Using a quantitative approach, you can use the CAPM to show that at equal risk/return, increasing the cost of capital of some companies (by limiting their access to funding because of low ESG score) actually make these companies a comparatively more profitable investment (for those that disregard ESG).

If you like these kind of paradoxes based on investor ethics, have fun discovering the world of Islamic finance and how to get interests when you cannot get interests.

Re: Companies with good ESG scores pollute as much as low-rated rivals

#112

Post by smfjaw » Thu, Aug 03, 2023, 12:36 AM UTC

gitfan86 wrote: post #101

ESG is such a obvious scam. It would be like this: Wife: Have you been cheating on me? Husband: Lets check my APS score. Wife: What? Husband: Adultery, Pushups and Soccer Watching score. Looks like I'm in the 1% of husbands as calculated by the experts. So I don't think you have anything to worry about.

offset your cheating (emmissions) by buying adultery (carbon) credits

Re: Companies with good ESG scores pollute as much as low-rated rivals

#113

Post by DevKoala » Thu, Aug 03, 2023, 12:37 AM UTC

The funny thing is that the Environmental metric is the only objective one while the Social and Governance ones can be bullshitted and manipulated. Those three things should have never been coupled. It’s all a scam.

Re: Companies with good ESG scores pollute as much as low-rated rivals

#114

Post by archsurface » Thu, Aug 03, 2023, 1:10 AM UTC

I thought I wouldn't comment on this because saying it's a scam would just get me downvoted regardless of how I present it - colour me surprised, it seems to be comfortably the majority sentiment.

Re: Companies with good ESG scores pollute as much as low-rated rivals

#115

Post by pmart123 » Thu, Aug 03, 2023, 1:26 AM UTC

tfandango wrote: post #60

lowkeyoptimist wrote: post #33

Earlier quoted context omitted.

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.

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?

That's most of investing though. Investors won't all agree the operating cash flow, asset base, organic sales growth if there's been M&A, etc. let alone with a P/E, P/FCF, EV/EBITDA ratio makes a company cheap or expensive. Yet, this doesn't make it political in nature though.

Re: Companies with good ESG scores pollute as much as low-rated rivals

#116

Post by RcouF1uZ4gsC » Thu, Aug 03, 2023, 1:32 AM UTC

Ygg2 wrote: post #106

gitfan86 wrote: post #101

ESG is such a obvious scam. It would be like this: Wife: Have you been cheating on me? Husband: Lets check my APS score. Wife: What? Husband: Adultery, Pushups and Soccer Watching score. Looks like I'm in the 1% of husbands as calculated by the experts. So I don't think you have anything to worry about.

Just offset CO2 emissions by hiring more diverse staff from New York. Brilliant! How come Fossil fuel industry never thought of that?

Actually, they did

https://www.investors.com/news/esg-companies-list-top-100-es...

ConocoPhillips and Exxon Mobil are one the list along with a trucking company at number 2 and various other oil companies.

Re: Companies with good ESG scores pollute as much as low-rated rivals

#117

Post by labster » Thu, Aug 03, 2023, 1:41 AM UTC

manzanarama wrote: post #107

cryptonector wrote: post #53

Earlier quoted context omitted.

> 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.

Isn't any decision that affects more than a few people political?

Yes, but ESG picks values to optimize for, and picking values is the political act.

Re: Companies with good ESG scores pollute as much as low-rated rivals

#118

Post by jquery » Thu, Aug 03, 2023, 1:51 AM UTC

zmgsabst wrote: post #22

CameronNemo wrote: post #13

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...

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

Why are you prefixing bigotry with "fashionable"? Seems like a shibboleth. The only "fashionable" bigotry I can think of right now is anti-trans bigotry, but I don't see how that links to the rest of your statement.

Re: Companies with good ESG scores pollute as much as low-rated rivals

#119

Post by jquery » Thu, Aug 03, 2023, 1:52 AM UTC

zarathustreal wrote: post #19

Zigurd wrote: post #14

Earlier quoted context omitted.

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 tel…

If you think ESG scoring indicates anything about the culture of a company I've got a bridge to sell you

Well, they nailed the fact that Tesla is hell to work for, I'll give them that.

Re: Companies with good ESG scores pollute as much as low-rated rivals

#120

Post by roody15 » Thu, Aug 03, 2023, 1:53 AM UTC

Yes because these companies just do the math… hmm being truly environmentally friendly is tough for maximizing profits… hmm okay let’s just do a bunch of corporate safe political progressive posturing and marketing on everything else to off-set the E score.

So a non-union mega corp that exploits labor in third world countries gets a decent overall ESG score by making a big show of support of gay/trans or “diversity” goals.

It’s math .. and the bottom line and honestly nonsense.