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The ESG push of the last 5+ years was rooted in good reasons. But the approach was wrong. In finance, ESG metrics are just factors like value, growth, momentum,
by anonu 4y ago
The ESG push of the last 5+ years was rooted in good reasons. But the approach was wrong. In finance, ESG metrics are just factors like value, growth, momentum, etc... Those factors need to explain risk vs returns. The issue is they never did. There was never any explanatory power behind these things. Even the massive backing by asset managers like Blackrock was not sufficient enough to create demand because ESG factors were all over the place: 20 different providers with 20 different BS methodologies - mostly driven by NLP-style approach to parsing quarterly reports. Ultimately you throw in some nice words and greenwash the heck out of your report and your ESG metrics go up.
The free and open market approach prevails. And if we want to see ESG impact the world around us, we should have the free market dictate how that happens rather than Larry Fink.
- OrangeMonkey 4y agoI would like to see not the 'free market' dictate how it happens - I would like to see companies that harm their investors end with their ceo/cfos perp walked out and arrested. I want to see companies remember they have a fiduciary duty to their investors.
- mijamo 4y agoInvestors live on earth. Climate change will incurr extremely high costs on anyone living on earth. Therefore it is part of their fiduciary duty to fight it for any company in the world. In a more cynical way, ESG is a way to try to escape tougher legislations that would impact revenues in a larger way, and so is also part of the fiduciary duty in that sense. Note that fiduciary duty already does not force companies to outsource to China even if that would save some money and increase benefits.
- OrangeMonkey 4y agoI am happy that, in the US at least, the current legal climate does not agree with you. In some countries, I have seen what you are saying becoming more and more pronounced. In Western Europe, specifically, you are seeing it. I imagine the upcoming cold winter in Germany and the scramble to secure supplies at any cost for their citizens will help fix this issue.
- Orothrim 4y agoGrow up, these climate changes will happen, the companies can make the appropriate changes now (early), or they can hold off and be forced to comply or die by governments.
- OrangeMonkey 4y agoPlease follow hacker news guidelines or choose not to post. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html Or, since your account is only 88 days ago, I guess create a new account. I don't bother replying to the "substance" of troll comments.
- passwordoops 4y agoThe fact that Texas, heart of O&G country, is a leader in renewables is a perfect illustration of the free market at work
- replygirl 4y agoESG has affected texas too. our grid is a laughing stock, subject to energy rationing multiple times a year and held hostage this summer by currency miners. we have to delay maintenance on fossil generation to compensate for the wind not blowing enough. the state is divesting from ESG in retaliation