Advisor Perspectives. Sept. 5, 2022. By Connor Doak.
Mahatma Gandhi once said, “First they ignore you, then they laugh at you, then they fight you, and then you win.” The environmental, social, and governance (ESG) investment community is deep within the third stage. ESG investing has been subjected to brutal headlines, politically motivated attacks and editorials from many market and political pundits in investment news outlets such as the Wall Street Journal, Barron’s, The Economist, the Financial Times and others over the first half of the year.
These headlines have called for the implosion of the “ESG bubble,” declared 2022 the year of ESG pushback, and even include Elon Musk tweeting out that “ESG is a scam” after Tesla was removed from an ESG-focused index.
Some of the attacks on ESG are warranted, especially given the confusion or misinformation regarding the definition of ESG investing, what falls under the ESG umbrella, and even the lack of consistency from ESG ratings firms.