What's wrong with ESG ratings?
06/14/2023 •
ESG ratings are criticized due to perceived inaccuracies, manipulation, and potential bias in rating practices. — Most comments question the validity, accuracy, and biases of ESG ratings, while some argue that these ratings can be manipulated by corporations. A notable point of contention is the concern over the lack of transparency and consistency in rating methods. Additionally, some individuals express skepticism over ESG's real-world impact and view it as a means for financial institutions to exert influence over corporations.
Stats
| 43% | 180 | |
| 24% | 101 | |
| 18% | 76 | 4Chan |
| 11% | 46 | Hacker News |
| 4% | 17 | Mastodon |
| 56% | Negative |
| 25% | Neutral |
| 19% | Positive |
| 45% | 😡 Anger |
| 38% | 😃 Joy |
| 12% | 😱 Fear |
| 5% | 😢 Sadness |
| 0% | 🥰 Love |
| 0% | 😯 Surprise |
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Story
- There's a perception that ESG scores can be manipulated and shaped by large corporations to meet their objectives, making them an instrument of control rather than an indicator of a company's commitment to sustainability.
- ESG ratings are perceived by some to be a distraction tactic used by corporations to divert attention from issues of class by focusing on politically charged issues related to race, gender, and climate change.
- There's a strong belief that ESG ratings are inflated or inaccurate, leading to companies with negative impacts or unrelated connections being mistakenly attributed high scores.
- Some individuals argue that the current focus of ESG rating firms on the environmental aspect enables companies to appear environmentally conscious without making significant changes.
- Tesla's low ESG rating has sparked controversy and criticism of the ESG scoring system, with some arguing that the system is used to push political agendas.
- Some commenters view ESG ratings as a social credit score system for large corporations, granting access to capital at favorable rates for compliance while penalizing non-compliance.
- The view that ESG is a scam designed to extract higher expense ratios from unaware investors is expressed by a portion of the community.
- There are those who argue that ESG ratings are crucial for protecting the public from companies that harm the world and are vital for societal rebuilding.
- Boycotting companies with low ESG scores is seen as a means of exerting consumer power, influencing these companies to align with public demands.
- There's a perception that companies fear having a low DIE/ESG score and that they prioritize maintaining a positive social credit score over their actual ESG performance.
- The high ESG ratings of the tobacco industry are attributed to strong returns for investors and financial stability, despite criticisms about the industry's negative health impact.
- A belief exists that ESG scores can lead to benefits such as lower cost of capital, reduced risk, and increased resilience during market downturns.
- High ESG ratings are viewed as a win-win situation for businesses and investors, indicating strong management, innovation, and risk management.
- Some people are skeptical about boycotting stocks with high ESG ratings, arguing that it would lead to boycotting nearly all tech stocks.
- A viewpoint suggests that ESG scores are responsible for the perceived decline in the quality of video games and movies.
- There's a concern about the increasing number of funds being stripped of their ESG rating, pointing towards governance issues and greenwashing practices.
- Some individuals dismiss ESG investing as a fraud that appeals to individuals with lower intelligence.
- A belief exists that ESG ratings have a significant impact on decision-making, holding sway over various aspects of business operations and investments.