Summarised by Centrist
US ESG funds have been “flat to slightly negative” since early 2022 according to Robert Jenkins of Lipper, a financial data provider.
Jenkins says ESG doesn’t work because it’s difficult to rate companies based on feelings or opinions, which then translates into a meaningful metric.
“We saw ratings from various companies, ours included, that made no intuitive sense. When you have a fracker getting an ‘A+’ on the environment and you have a company like Netflix getting a ‘D-‘ on the environment, that makes no sense.”
Jenkins says Artificial Intelligence may be the best thing to happen to E.S.G. The ability of AI systems to crunch huge amounts of data may bring legitimacy back to the concept, but as tensions rise internationally expect to see a lot of movement away from E.S.G. themed products into traditional safe havens, says Jenkins.