The fundamental contradiction of ESG is being laid bare
Profit-seeking companies have too little incentive to save the planet
Can profit-seeking companies really help save the planet? The question has long dogged the practice of environmental, social and governance (esg) investing. Judging by the giddy growth in all things esg, you might have thought the answer to it must be Yes. More than $35trn of assets worldwide are said to be monitored using some sort of sustainability lens, an increase of 55% since 2016. Investors, banks and businesses have signed up to a series of alliances, from the gfanz and the gsia to the pri and the iigcc, pledging to bring down their own carbon emissions and those of their portfolios. And bosses of s&p 500 companies now mention esg nine times a quarter in earnings calls, on average, compared with just once, if at all, in 2017.
This article appeared in the Leaders section of the print edition under the headline “All talk, no trousers”
Leaders October 1st 2022
- How to make sense of Xi Jinping, China’s enigmatic ruler
- Ignore Putin’s fake referendums and keep helping Ukraine
- Markets are reeling from higher rates. The world economy is next
- The fundamental contradiction of ESG is being laid bare
- Iran’s tired regime is living on borrowed time
- How not to run a country
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