ESG. Environment, social, governance. How many times have you heard of it? Companies fill their mouths with it and even use it as a label on financial products. The offer of green funds in 2020 reached a total value of 1.7 trillion dollars. But to the explosive growth does not always match consistent quality and transparency of products, as emerges from a research just published by InfluenceMap of 723 equity funds specifically marketed using keywords related to the ESG acronym and climate, with over $ 330 billion in total net assets.
One of the problems is relative lack of standards and regulations that currently govern the marketing of ESG and climate funds. Well out of 593 equity funds identified as ESG with more than $ 265 billion in total net worth, 421 (71 percent) have a negative score against alignment with the Paris targets, indicating that the companies in their portfolios are misaligned. by global climate goals.
In the narrowest category of climate funds, 72 out of 130, with over $ 67 billion in total net worth, managed by big names like BlackRock and State Street, not only are they misaligned with the Paris targets, but they continue to hold $ 153 million worth of shares in companies in the fossil fuel production value chain, such as TotalEnergies, Halliburton, Chevron, and ExxonMobil. In short, not all that glitters is green.