ESG Remains Largely Undefined, So Investment & Business Firms Can Claim It While Doing Nothing
EDIT
ESG (environmental, social and corporate governance) describes investments made with an aim to contribute to a better environment, society or workplace and it’s becoming increasingly popular. The share of global investors that have applied ESG criteria to at least a quarter of their total investments has jumped from 48% in 2017 to 75% in 2019, according to data from audit firm Deloitte.
EDIT
This is the biggest challenge facing sustainable investing: there is no clear-cut criteria about what makes a company ESG investable. For instance, one fund manager could argue that a company is not ESG-friendly and doesn’t invest accordingly, while another portfolio chief might say the same firm is following sustainable criteria.
“When you think about the composition of ESG funds it’s first of all important to remember they are still meant to be a fund invested to get a return for the portfolio. And so they can tilt based on industry groups, based on sector views and that may or may not relate to an ESG view,” Sheila Patel, chairman of Goldman Sachs Asset Management, told CNBC.
EDIT
There are similar questions when it comes to tech giants. The fourth largest ESG fund under assets, Parnassus, had 17.26% of shares in companies such as Apple, Alphabet and Amazon. However, the e-retailer Amazon, for example, registered a carbon footprint of 51.17 million metric tons of carbon dioxide last year — a 15% annual increase. But some portfolio managers argue that Amazon’s commitment to reduce its carbon emissions and become carbon neutral by 2040 is a reason why the stock is ESG-friendly.
EDIT
https://www.cnbc.com/2020/10/14/esg-investing-meaning-is-under-the-microscope-as-the-money-rolls-in.html
