ESG Investing is Getting Put on Blast!
By Mark Schwendau
People of retirement age that have stocks, bonds, and retirement accounts began to get emails on blast yesterday that they may want to consider having their financial advisors and brokers move their money out of stocks that are endorsed simply for having good ESG scores. The sudden rush in communications may have been related to a news post in Fortune.
That post, titled “ESG markets shudder as Adani Group credit arrangements suggest inadvertent financing of heavy polluters,” seemingly exposes ESG as a form of financial fraud. In this case, the fraud is giving bad or false investment strategy advice.
First, it is good to understand the metrics of what constitutes a company’s ESG score as relates to “corporate responsibility” as per the following:
Environmental issues can include:
- Carbon emissions
- Climate change vulnerability
- Water sourcing
- Biodiversity & land use
- Toxic emissions & waste
- Packaging material & waste
- Electronic waste
Social issues can include:
- Labor management
- Worker safety training
- Supply chain labor standards
- Product safety & quality
- Consumer financial protection
Governance issues can include:
- Composition of the board in terms of diversity & independence
- Executive compensation
- Accounting practices
- Business ethics
- Tax transparency
Credit for the above outline is given to Jason Krychiw an ESG consultant at Conservice, for highlighting this very complex matrix of ESG in a concise format. Therefore, an ESG score is a measure of how well a company addresses risks concerning environmental, social, and governance issues in operations.
Historically this concept is said to date back to the 1960s but did not become a thing until 2004 when a report titled “Who Cares Wins” was published after a joint initiative of financial institutions by invitation of the United Nations (UN). The first use of the phrase ESG was by the United Nations Environment Programme Initiative in the “Freshfields Report” of October 2005.
Environmental, Social, and Governance (ESG) is part of the globalist’s efforts to endorse WOKE companies to push their progressive agenda while shunning traditional capitalist companies. The reason why this charade was put on blast yesterday is corporations like BlackRock are using your retirement dollars to push “social equity” initiatives, the liberals’ green agenda, without any real regard for achieving investment gains.
The Fortune article points out that “More than 500 (retirement) funds registered in the European Union (EU) as ‘promoting’ ESG goals hold Adani stocks, either directly or indirectly, according to data compiled by Bloomberg.”
On the surface, one might think the ESG rating system is a good thing, similar to the credit rating system we have for private individuals here. Where it becomes an obvious scam driven by a globalist progressive agenda is when you do a little research… and one does not have to look far or long.
Elon Musk’s Tesla has a medium rating of 29 in the 58th percentile, while Jeff Bezos’ Amazon has a high rating of 30 in the 64th percentile. An ESG score of less than 50 is regarded as poor, while a score of more than 70 is considered excellent. One can use the Mergent Online database to look up the company’s scores .
People can readily see that this is more about Musk becoming a Twitter owning, Trump account restoring, new Republican than any concern for E, S, or G. Meanwhile, Amazon’s Democrat woke man Jeff Bezos gets to fill all the landfills with his shipping and packing materials with a free pass. Critics of this ESG rating system point out that Amazon’s waste is only calculated at the company. Customer waste thereafter does not play into their ranking.
If that hypocrisy is not enough for you, consider both Elon Musk and Jeff Bezos are union busters, and historically, the Democratic Party of America is pro-union. So, again, why does Bezos get a free pass while Musk gets crucified? True progressive liberal Democrats (not the socialist hypocritical kind of today) would call out both of these men, as the two richest men in America, for achieving their wealth on the backs of the American workers.
As the television ad men say, “But wait, there’s more!”
Some try to oversimplify resistance to the ESG scoring system of companies by claiming it is just a progressive versus conservative issue, but the problem with ESG as an investment approach is the political posturing and hypocrisy that lies therein. An ESG approach supposedly yields guilt-free returns on investments by excluding such investments as fossil fuels and those of the defense industry while prioritizing sectors such as green energy. But does it?
Burning coal puts out more carbon dioxide than alternatives like oil and gas and this gives companies a black mark in their ESG rating. That is what has been happening in Europe since the sabotage of the Nord Stream 1 and 2 pipelines from Russia, cutting off a major source of natural gas to that part of the world. But if you look at the environmental damage done by this intentional destruction of these pipelines when compared to either normal oil or coal usage, the ESG system is obviously fraudulent.
You can clean up a coal spill pretty easily. You can clean up a crude oil spill less easily. You cannot clean up a natural gas leak at all.
Here is an ESG question for all the globalist environmentalists they probably won’t and can’t answer:
Since “governance” is the third part of the ESG scoring system, and acting U.S. president Joe Biden threatened to blow up the Nord Stream pipelines before they were actually sabotaged, does that mean all U.S. companies are now going to get dinged for “environmental” points for the action Joe Biden? After all, Europe’s increased carbon emissions having to go back to coal were through no fault of their own!
People of the world are increasingly getting tired of these charades with hidden objectives to a hidden agenda seemingly concocted and perpetrated by people less intelligent than ourselves. I, for one, do not want my retirement investment money based on their ESG system in any form or fashion. I want my investments to be made regardless of ESG ratings.
This ESG system is just as stupid as Democrats and their recent “equality” thrust to force more diversity into our government and justice system. Your sexuality and skin color are totally irrelevant to the jobs at hand! The incompetence of Biden-appointed people like Pete Buttigieg, Karine Jean-Pierre, Dr. Rachel Levine, and Sam Brinton is all the proof you need!
Copyright © 2022 by Mark S. Schwendau
Mark S. Schwendau is a retired technology professor who has always had a sideline in news-editorial writing where his byline has been, “Bringing little known news to people who simply want to know the truth.” He classifies himself as a Christian conservative who God cast to be a realist. Mark is an award-winning educator who has published seven books and numerous peer-reviewed trade journal articles,, some of which can be found online. His father was a fireman/paramedic, while his mother was a registered nurse. He holds multiple degrees in technology education, industrial management, OSHA Safety, and Driver’s Education. His personal website is www.IDrawIWrite.Tech.