Quarterly Q3 2022

ESG investing has exploded recent years, a total of $35 trillion is monitored through one ESG lens or another. The main idea of ESG is that firms should not only be based on their financial performance but also on their environmental and social record and their governance. The financial newspaper the Economist recently started a discussion about the effectiveness of ESG criteria, according to the Economist there are currently three problems with ESG investing; it does not provide coherent guide for investors and firms to make trade-offs that are inevitable in society, ESG is not being straight about incentives (polluting the environment is often very profitable for companies) and the various scoring systems of ESG ratings have gaping inconsistencies.