The ideal is that companies that cause environmental damage, treat their employees and communities badly, and cheat their shareholders can be boycotted by those

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!