Environmental Inquisition
The first thing to know about an ESG (environmental, social, and governance) rating is that it is given to both countries and companies. Certain investors use the ESG rating to determine if they wish to invest in a company or within a country.
The E of ESG or environmental corresponds to how an investee protects the environment and includes national or corporate policies addressing climate change. The latter seems to be the weightiest of all environmental assessments. S or Social investigates how the investee manages relations with employees, suppliers, customers, as well as the communities in which it operates. In some cases, investors consider ‘woke’ policies as well. Governance deals with the investee’s leadership, executive pay, audits, and the rights of a shareholder.
In this matter, an article in Reuters reads, “Companies listed on the London Stock Exchange’s premium market have been required since 2021 to make climate-related disclosures to investors in line with the global Taskforce on Climate-related Financial Disclosures (TCFD) – or to explain why they have not.”
That pretty much substantiates my previous opinion that environmental assessments seemed to overshadow the other two ESG elements and as well, force affected companies to ‘toe the line’ or conform and agree with the TCFB.
The TCFB, chaired by the investor, environmental activist, and ex-New York Mayor, Michael Bloomberg, asserts, “Financial markets need clear, comprehensive, high-quality information on the impacts of climate change. This includes the risks and opportunities presented by rising temperatures, climate-related policy, and emerging technologies in our changing world.”
Thus, companies listed on the London Stock Exchange are mandated by authoritarian decree to be supportive of anthropogenic climate change, and of course, there are fines, undoubtedly substantial, if a company circumvents its activities away from its stated ESG declaration.
If anyone thinks this is satisfactory, then they do not have compassion for those that cannot afford the extra sums corporations charge for their products and/or services resulting from their work in creating, maintaining, and working with an ESG rating.
In addition, it should be noted that nations like Sri Lanka, South Africa, Argentina, Ghana, and the Netherlands have very high ESG ratings and are currently under economic collapse resulting from it.