Yale Study: ESG Investing Isn’t Doing Much For The Environment

  • There are examples of large oil producers offloading older assets to improve their green credentials, only for their mines and oil rigs to become dirtier in the hands of new owners
  • When brown, or not so green companies are starved of capital, they become dirtier to avoid bankruptcy.
  • Ultimately it will take big investments, including by ‘dirty’ industry, energy producers and newer green start-ups to solve our environmental challenges.

ESG or environmental, social and governance investing is facing troubles. Higher bond yields drove an astonishing £304m out of the sector in May. This largely reflects a natural market dynamic – investors are chasing higher returns by moving from shares to bonds. Yet perhaps there should be some deeper angst at play. Is ESG investing really everything it is cracked up to be?
It’s easy to understand the underlying appeal. Putting your savings into “good” companies, rather than those amoral profit-seeking entities, feels righteous. But it’s worth unpacking what that means in practice. Read More