The Economist has a nice summary of the contradictions of ESG investing:
There are plenty of problems with the esg movement. Working out if assets are esg-compliant is complex, and prone to bias, mismeasurement and public-relations peacocking. Proponents of feel-good investing want to have their cake and eat it, insisting that the focus on stakeholders is actually better for shareholders, too.But it also correctly identifies the problems with anti-ESG inveting:
At the moment, taking a position against esg is much more expensive than going with the crowd. This is particularly true when it comes to anti-esg laws, which are more preoccupied with bashing esg-promoting firms than with prioritising shareholder returns and cutting costs for taxpayers.BOTTOM LINE: letting politics interfere with inveting criteria is going to cost you.
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