ESG Investing isn’t Designed to Save the Planet

Erroneously, ESG (environmental, social, and governance) investing is widely assumed to reward companies for helping the planet.  However, ESG ratings, which underlie ESG fund selection, are based on the impact the changing world has on companies’ profit and loss.  Asset managers have deliberately allowed the confusion to go unrefuted and even encourage it since ESG funds are highly popular and come with higher management fees.  The harm is that ESG investing leads policymakers to believe that the market can remedy the threatened environmental and socioeconomic disaster while only prompt significant government intervention can avert imminent climate catastrophe.