Greenwashing.com

We begin the saga of ESG investing. Yesterday, we left off with reader mail wondering why we were delving into this topic… I believe our reader’s reply was “very disappointed”.

Well, here’s a quick introduction as to why.

ESG = Environmental, Social and Governance.

It’s the brainchild of a UN commission in October 2005: the “United Nations Environment Program Initiative in the Freshfields Report.

Since inception, the term was mentioned in 1% of the earnings calls. Meaning, there was not a lot of interest in using the metric as a way of determining whether a company fits the nebulous criteria of what makes good environmental, social or governance practices.

Enter Klaus Schwab, founder and chairman of the World Economic Forum and Larry Fink of BlackRock, a hedge fund with $11 trillion under management. Throw in Vanguard, who has also adopted ESG guidelines, and you’ve got somewhere around $18 trillion committed.

As we’ve also mentioned more than a few times at COP26, Mark Carney, the chair of Glasgow Financial Alliance for Net Zero (GFANZ) raised $130 trillion for their goal of net zero carbon emissions 2050. Money like that goes a long way on Wall Street and through the halls of power.