Do ESG Ratings simplify matters or make them worse? asks Ali Wilson, Techspert: Investment, The Verve Group
ESG remains the acronym on everyone’s lips and yet it seems that we still don’t truly know what it is, or even what it wants to be at the present time. Following on from my previous article for Professional Paraplanner, covering a few misunderstandings around the topic, I’d like to continue on that note with how the industry has tried to simplify things, but seemingly have just made things worse.
In an attempt to simplify ESG offerings, a number of firms have implemented ESG ratings, which rate an investment fund or portfolio based on their own assessment of the characteristics of the underlying investee companies. The question is “how reliable and consistent can they be for advisers wanting to incorporate an ESG proposition?” My answer is “not very reliable and consistent at all!” as you will see demonstrated below.
Read more in out Professional Paraplanner article here.