"If practically every company qualifies for inclusion in an ESG benchmark and then has roughly the same weight in that benchmark as in a conventional benchmark, then what’s the point of the ESG benchmark? Where is the benefit for the investor? Why should companies change their business practices when they will anyway be included in an ESG benchmark with minimal effort and don’t risk losing any of their investors?"
I have been asking myself the very same questions lately. The dissonance is greatest at BlackRock: On the one hand, BlackRock is loudly pounding the drum for climate and sustainability accounting and pointing out climate risk, while on the other hand, there is no discernible difference that I can see between their ESG-labelled funds and their "conventional" funds.
Is everybody falling for this BS? As an option for risk management, these funds are totally useless! This makes me angry precisely because I'm an advocate for ESG standards. They are ruining the credibility of the whole enterprise.
Excellent post, Joachim!
"If practically every company qualifies for inclusion in an ESG benchmark and then has roughly the same weight in that benchmark as in a conventional benchmark, then what’s the point of the ESG benchmark? Where is the benefit for the investor? Why should companies change their business practices when they will anyway be included in an ESG benchmark with minimal effort and don’t risk losing any of their investors?"
I have been asking myself the very same questions lately. The dissonance is greatest at BlackRock: On the one hand, BlackRock is loudly pounding the drum for climate and sustainability accounting and pointing out climate risk, while on the other hand, there is no discernible difference that I can see between their ESG-labelled funds and their "conventional" funds.
Is everybody falling for this BS? As an option for risk management, these funds are totally useless! This makes me angry precisely because I'm an advocate for ESG standards. They are ruining the credibility of the whole enterprise.