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Companies with good ESG scores pollute as much as low-rated rivals
121–130 of 187 posts
Re: Companies with good ESG scores pollute as much as low-rated rivals
#122ESG 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.
There's been essays written around that framing, such as this one ('ESG Data is Like Less Wife Beating ', 2019): https://www.blorrainesmith.com/single-post/esg-data-is-like-...
The same author has moved towards proposing 'matereality' assessments in a different way: https://www.blorrainesmith.com/single-post/when-materiality-...
There's also groups advocating for alternatives to ESG, such as https://www.r3-0.org/
Re: Companies with good ESG scores pollute as much as low-rated rivals
#123ESG 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.
It's a thinly veiled signal that a corporation will not act out against the status quo, and in return they will have protection from their corporate media and regulatory attack dogs.
The sad thing is they have scientifically captured and subverted mainstream activism, which for a while around 50-60 years ago emerged as what appeared to be their biggest threat. You can "resist" the state of things all you like, but you're not allowed to say anything about corporations that traffic arms to 3rd world countries because they tweet out BLM logos and rainbow flags now and again. And you have to resist by supporting mainstream political parties and politicians who have been around for decades and are definitely not complicit or responsible for what you are resisting.
Re: Companies with good ESG scores pollute as much as low-rated rivals
#124The 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.
I dunno, I think it could be combined in smarter ways, e.g. min(E,S,G) (or some kind of soft-min)[1]. Or give different weights for more uncertain measures. I think there's a very large amount of knowledge (in various fields) around evaluating those things, and we could have much more if we put some effort; also, we don't necessarily need to make everything 100% based on a small set of metrics. You could have some kind of adaptive evaluation that tries to find the most impactful events for that organization (e.g. trying to track down pollutants and quantify their impact, trying to track down social impacts and quantify them, etc.). In medical and charity fields for example there is QALYs (which do have serious problems still!), but are at least a reference point for impact -- to given an example; in comparing development we have HDI; etc..
Overall, I think trying to improve those things in a systematic way is the only real way to improve them. I want to know how well each company is doing in various areas. We are currently mostly blind to that.
And we should be mindful not to let the ones trying to game and undermine the systems win, and sincerely look at impact in all areas.
[1] Ideally, I think a metric would be able to measure something like a 'meaning of life difference' from different choices (and assign a corresponding metric for say an organization based on certain counterfactuals). Of course that's too difficult in general, but we can strive for example to keep the planet healthy and establish some standard "unit" for a healthy society (could be translated to money, but there could be some issues with that), establishing a trade-off say between say saving someone's life now (through a health intervention), and saving lives in the future by improving planetary conditions (with less pollution). Those things are perhaps surprisingly comparable (and surprisingly linear/additive as well).
There are mentions of Goodhart's Law and it certainly applies somewhat (if we tried simple, naive metrics): but Goodhart's Law doesn't apply when there are real, smart people doing the evaluation, in a dynamic way, using quantitative tools sensibly. And finally there are choices perhaps no such evaluation could capture, questions about what future do we want for ourselves in a broader cultural and artistic sense (which is why in the end freedom to support what you want as an individual is important).
I really think this is going to play a significant part in how we address many large scale issues!
Re: Companies with good ESG scores pollute as much as low-rated rivals
#125From https://www.ft.com/content/b9582d62-cc6f-4b76-b0f9-5b37cf15d... :
> Keeran Beeharee, vice-president for ESG outreach and research at Moody’s, agreed that ESG investment does not necessarily help an investor create a low-carbon portfolio, or any other specific goal.
> “[There is a] perception that ESG assessments do something that they do not. ESG assessments are an aggregate product, their nature is that they are looking at a range of material factors, so drawing a correlation to one factor is always going to be difficult,” Beeharee said.
> “In 2015-16, post the SDGs [UN sustainable development goals] and COP21 [Paris Agreement], when people began to really focus on the issue of climate, they quickly realised that an ESG assessment is not going to be much use there and that they need the right tool for the right task. There are now more targeted tools available that look at just carbon intensity, for example,” he added.
Emission intensity includes CO2 (Carbon Intensity) and also Methane and other emissions.
Emission intensity: https://en.wikipedia.org/wiki/Emission_intensity
UN SDG Indicators 2023 revision (Goals, Targets, Indicators) https://unstats.un.org/sdgs/indicators/Global%20Indicator%20... ctrl-f "carbon", "emission", "methane"
> Goal 9. Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation
> 9.4.1 CO2 emission per unit of value added
> Goal 13. Take urgent action to combat climate change and its impacts
> 13.2.2 Total greenhouse gas emissions per year
SDG9 > "Target 9.4: Upgrade all industries and infrastructures for sustainability": https://en.wikipedia.org/wiki/Sustainable_Development_Goal_9...
SDG13 > "Target 13.2: Integrate climate change measures into policy and planning": https://en.wikipedia.org/wiki/Sustainable_Development_Goal_1...
How should ESG composite scores be updated to reflect Emission intensity (to include CO2, and CH4,) as a weighted factor?
Re: Companies with good ESG scores pollute as much as low-rated rivals
#126ESG 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
I think that those credits are called "flowers".
I'm only halfway joking. A lot of people do try to address their guilt over bad behavior by doing nice things. And a lot of people who receive those nice things don't want to think about why they are being treated well. The easiest person to scam is the one who wants to believe the scam. And any kind of credit program will attract people who want to believe.
Re: Companies with good ESG scores pollute as much as low-rated rivals
#127Earlier quoted context omitted.
> 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 p…
Wow, this is chilling.
In case it wasn't obvious: the examples are firmly tounge-in-cheek.
The point is simply that markets are designed for maximizing incentives, and "ESG" as commonly defined isn't -- at least definitionally -- aligned with those incentives.
That point is pretty value neutral with respect to ESG goals; ie, believe what you want about how the world ought to be, but don't fool yourself into thinking that throwing you slogans at markets with different incentives will result in outcomes consistent with your sloganeering.
Re: Companies with good ESG scores pollute as much as low-rated rivals
#128ESG is a waste of time, I can't wait until this fad dies down.
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.
The ideal is that companies that cause environmental damage, treat their employees and communities badly, and cheat their shareholders can be boycotted by those who don't want to fund this. Another motivation is those who think bad ESG scores are correlated with worse performance over long period of time. e.g. You think there will eventually be a carbon tax and this will hit coal companies really hard so you don't want to be the bag holder in 2050.
In practice it's just another financial product that first and foremost makes money for the sellers through higher fees. Some ESG funds cheat their customers by failing to perform the specific ESG vetting they promised in writing to do!
Re: Companies with good ESG scores pollute as much as low-rated rivals
#129ESG 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?
Well, if what's bad is governance, you may not be able to influence the results of shareholder votes because of the governance issues.
Re: Companies with good ESG scores pollute as much as low-rated rivals
#130Earlier 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?
"Society" has plenty of disagreements on the G, but, fortunately for the companies in question, shareholders don't. G measures, essentially, how much the company prioritizes its shareholders.