Do companies with good ESG scores pollute as much as low-rated rivals?
08/02/2023 •
Yes — The majority of comments suggest that high ESG scores do not necessarily imply lower pollution levels and these scores can be manipulated, citing examples like ExxonMobil and BP which have high ESG scores but significant pollution levels. Also, concerns were raised about standardization and reliability of ESG scores.
Stats
| 75% | 147 | |
| 10% | 19 | Hacker News |
| 8% | 16 | |
| 7% | 13 | 4Chan |
| 55% | Negative |
| 30% | Neutral |
| 15% | Positive |
| 50% | 😡 Anger |
| 42% | 😃 Joy |
| 7% | 😢 Sadness |
| 2% | 😱 Fear |
| 0% | 🥰 Love |
| 0% | 😯 Surprise |
😡
😃
😢
Story
- Many commenters believe that a high ESG (Environmental, Social, and Governance) score does not necessarily correlate with lower pollution levels, citing that companies can manipulate their scores, leading to situations where high-scoring companies still pollute significantly.
- Specific companies such as ExxonMobil and BP are often mentioned as examples of organizations with high ESG scores despite their environmental impact, causing skepticism towards the ESG rating system.
- There's a viewpoint that ESG scores are often industry-specific, meaning companies are compared within their industry, not against companies from different sectors.
- Critics argue that the ESG rating system lacks standardization, making it challenging to compare scores accurately between different companies and industries.
- ESG scores are seen as a risk aversion system that considers various factors, not solely social issues, which some commenters believe contributes to better environmental practices and overall risk aversion.
- Investment firms use ESG scores as a criterion for investment decisions, implying that companies with low scores may face difficulties attracting investments.
- Tesla's lower ESG score is often mentioned, with various reasons given including issues with governance and social factors, lack of transparency in the supply chain, allegations of racial discrimination, and poor response to federal safety investigations.
- Some commenters are skeptical about the objectivity of ESG scoring, suggesting it is subjective and can be used as a means of control.
- Despite the criticisms, some commenters argue that ESG scores play a significant role in promoting sustainability and reducing pollution, as they lead to lower pollution levels and higher resilience during market downturns.
- Some commenters express frustration over the suppression of information about investment/brokerage firms with low ESG scores online, arguing for more transparency in the system.
- There are views that ESG heavily influences management decisions and can sometimes go against the best interests of customers or shareholders.
- A number of commenters suggest focusing on governance (G) rather than solely relying on ESG scores to determine a company's environmental impact.