3 ms·

Matt Levine: It's Easy to Make Oil Companies ESG: https://www.bloomberg.com/opinion/articles/2023-07-12/it-s-easy-to-make-oil-companies-esg#xj4y7vzkg https://ww

Matt Levine: It's Easy to Make Oil Companies ESG: https://www.bloomberg.com/opinion/articles/2023-07-12/it-s-easy-to-make-oil-companies-esg#xj4y7vzkg https://www.bloomberg.com/opinion/articles/2023-07-12/it-s-e...

lofatdairy 3y ago
Was gonna post this. That said, this is not what Levine is writing about. Levine is writing about how you can restructure your portfolio to gain exposure to fossil fuels _without_ lowering your ESG metrics by simply investing in companies with fossil fuel holdings (since then your ESG is calculated by the carbon emissions of the holding firms and not the assets themselves). Here, the authors are essentially concluding that ESG ratings are actually poorly correlated w/ the actual emissions of the firms being rated. This is probably because the environmental metrics of ESG scores are forward-looking (thus you can offset current pollution by aggressive reduction projections), but I'm not in this field so I don't know anything more.
MostlyStable 3y ago
Also, there's evidence that moving investment from polluting to non-polluting industries at best has almost no impact, and potentially makes things worse: https://www.icpmnetwork.com/wp-content/uploads/2023/07/Counterproductive-Sustainable-Investing-the-Impact-Elasticity-of-Brown-and-Green-Firms.pdf https://www.icpmnetwork.com/wp-content/uploads/2023/07/Count...
- FormerBandmate 3y ago
  Europe defunded their oil and gas industry and only great things happened from it. Just ask Ukraine The only way to stop pollution is to consume green. That’s it. The Saudis and the Russians don’t care about ESG
  - deleted 3y ago
    [deleted]
  - brmgb 3y ago
    Europe never defunded its oil and gas industry. I have no idea of what you are talking about. Germany used to buy Russian gas. The European oil industry is mostly in France and the UK (and Norway). Anyway ESG never was big in Europe and is now entirely dead. The EU mandates far better reporting in the CSRD and the texts linked to the european green taxonomy with actually meaningful KPIs and financial data having to be disclosed. A quick look at the gap between ESG scores and EU Green taxonomy alignment results will tell you all you need to know about ESG scores by the way. They are meaningless.
- therealdrag0 3y ago
  This topic was discussed on freakanomics for those wanting an easy form.

lofatdairy 3y ago

Was gonna post this. That said, this is not what Levine is writing about. Levine is writing about how you can restructure your portfolio to gain exposure to fossil fuels _without_ lowering your ESG metrics by simply investing in companies with fossil fuel holdings (since then your ESG is calculated by the carbon emissions of the holding firms and not the assets themselves). Here, the authors are essentially concluding that ESG ratings are actually poorly correlated w/ the actual emissions of the firms being rated. This is probably because the environmental metrics of ESG scores are forward-looking (thus you can offset current pollution by aggressive reduction projections), but I'm not in this field so I don't know anything more.

MostlyStable 3y ago

Also, there's evidence that moving investment from polluting to non-polluting industries at best has almost no impact, and potentially makes things worse: https://www.icpmnetwork.com/wp-content/uploads/2023/07/Counterproductive-Sustainable-Investing-the-Impact-Elasticity-of-Brown-and-Green-Firms.pdf https://www.icpmnetwork.com/wp-content/uploads/2023/07/Count...

FormerBandmate 3y ago
Europe defunded their oil and gas industry and only great things happened from it. Just ask Ukraine The only way to stop pollution is to consume green. That’s it. The Saudis and the Russians don’t care about ESG
- deleted 3y ago
  [deleted]
- brmgb 3y ago
  Europe never defunded its oil and gas industry. I have no idea of what you are talking about. Germany used to buy Russian gas. The European oil industry is mostly in France and the UK (and Norway). Anyway ESG never was big in Europe and is now entirely dead. The EU mandates far better reporting in the CSRD and the texts linked to the european green taxonomy with actually meaningful KPIs and financial data having to be disclosed. A quick look at the gap between ESG scores and EU Green taxonomy alignment results will tell you all you need to know about ESG scores by the way. They are meaningless.
therealdrag0 3y ago
This topic was discussed on freakanomics for those wanting an easy form.