Climate change has made ESG a force in investing
But the figures behind ESG rating systems are dismal
“LABELLING BASED on incomplete information, public shaming, and shunning wrapped in moral rhetoric,” said Hester Peirce, a straight-talking commissioner at America’s main financial regulator, the Securities and Exchange Commission, in June. She was taking aim at the scoring systems that purport to assess firms’ performance based on environmental, social and governance (ESG) factors. Yet love them or hate them, ESG scores are becoming ever more important in the world of investing and capital markets. At least $3trn of institutional assets now track ESG scores, and the share is rising quickly.
This article appeared in the Finance & economics section of the print edition under the headline “Poor scores”
Finance & economics December 7th 2019
- Climate change has made ESG a force in investing
- The Trump administration’s trade policies clash with each other
- Tax our tech and we’ll blacklist your bubbly
- Splits in Italy threaten to derail euro-zone reforms
- The perils and rewards of economies in rehab
- Myanmar admits foreign life insurers
- For 15 years two currencies have outperformed all others
- Created to democratise credit, P2P lenders are going after big money
From the December 7th 2019 edition
Discover stories from this section and more in the list of contents
Explore the editionMore from Finance & economics
China meets its official growth target. Not everyone is convinced
For one thing, 2024 saw the second-weakest rise in nominal GDP since the 1970s
Ethiopia gets a stockmarket. Now it just needs some firms to list
The country is no longer the most populous without a bourse
Are big cities overrated?
New economic research suggests so
Why catastrophe bonds are failing to cover disaster damage
The innovative form of insurance is reaching its limits
“The Traitors”, a reality TV show, offers a useful economics lesson
It is a finite, sequential, incomplete information game
Will Donald Trump unleash Wall Street?
Bankers have plenty of reason to be hopeful