Bloomberg Businessweek published a report this week outlining the problem with ESG investing. It’s a lengthy analysis with lots of facts and figures, so I thought it would be worthwhile to summarize its major findings.
Dig deeper → 2 min
Meet MSCI: the ESG matchmaker
MSCI is the world’s premier ratings company for environmental, social and governance (ESG) designations. It’s the ESG equivalent of Moody’s for insurance ratings.
MSCI has become the de-facto standard for smacking “sustainable” on any investment fund. The impact of sustainable investing has suffered as a result.
What’s the problem with MSCI ESG ratings?
According to Bloomberg’s report, MSCI ratings don’t accurately measure the impact of a company on the Earth. Rather, their ratings measure the impact of the Earth on a company.
It’s a powerful distinction that has damning effects on the real-world impact of ESG ratings. And it’s a method that MSCI openly boasts as a logical indication for relevant stakeholders.… Read the rest
