To: Clam digger who wrote (11980 ) 9/15/2021 12:09:33 PM From: Kirk © Respond to Interesting that what you mentioned is a topic on SA today....seekingalpha.com ESG investing - a mistake? Valuation expert and NYU professor Aswath Damodaran "cannot find" the good points that derive from the recent focus on "environmental, social and governance" for corporations and fund managers. In a series of tweets, the closely followed "Dean of Valuation" argued that the difficulty of determining whether a company or fund was "good" in terms of ESG made the measure difficult to apply and is why services disagree on ESG rankings and scores. The thread: " It will not get easier over time, because we have different value systems. Your measure of 'goodness' will not match mine and the evidence on ESG's effect on value is muddled . A stronger case can be made that companies should not be bad, (because they will face higher funding costs and failure risk) than that they should spend money to be good. If good firms have lower funding costs, arguing that investing in good companies will earn higher returns is internally contradictory, and incoherent, since the link between ESG & returns is more a reflection of pricing than it is of how ESG affects value," continued Damodaran, who is also a Seeking Alpha contributor . "In the old model, companies focused on business, investment funds on returns, and shareholders chose how much, and who to give to, in society. In the ESG model, companies and fund managers make those choices instead... not clear how or why society benefits. Why is ESG being sold so aggressively? Because accountants, measurement services, fund managers & consultants are on the ESG gravy train, with stockholders & taxpayers paying. Corporate CEOs are buying into ESG, because it makes them accountable to no one. Bring your moral code into your own business & investment decisions, but investing other people's money to advance what you view as 'good' is hubris. Accept that being good is more likely to cost & inconvenience, than to help, you, and be okay with that." Go deeper: In 2020, BlackRock ( BLK ) - one of the industry's most prominent supporters of sustainable investing - pledged to put environmental stewardship at the heart of how it invests its nearly $9T in assets. While the company did make big progress on its goals last year, there has still been quite a bit of criticism . Some say the asset manager is still way behind its peers in Europe, which are being much harder on companies around climate change issues and stewardship, while the company has also been accused of "greenwashing" in the past. BlackRock has also pledged to integrate ESG into all of its actively managed portfolios, though more than half of its assets are managed passively. ( 11 comments )
