Posted on 04/26/2022 4:19:27 AM PDT by MtnClimber
One of the most insidious initiatives from the left has been the insertion of political factors into investment criteria that govern the allocation of capital. So-called “ESG” (environment, social, governance) criteria for judging the creditworthiness of securities have been embraced by credit rating agencies like Standard and Poors (S&P) in issuing ratings that determine the interest rates that bond issuers must pay when they seek to borrow funds.
Bond ratings are supposed to tell investors about the risk they face if they buy a bond, based on quantifiable information and objective factors. Aside from the fact ESG has nothing to do with the likelihood of interest and principal being repaid, it is an amorphous concept that has no commonly accepted measurable underpinning. The only thing the rating is supposed to do is describe the risk of nonpayment. Woke values have nothing to do with that calculation.
Fortunately, a pushback is beginning to come. James Freeman of The Wall Street Journal cites Karen Pierog’s report in the Bond Buyer on Utah’s response to S&P’s use of ESG to rate its bonds. It should be noted that Utah enjoys a top credit rating.
Utah’s top elected officials demanded on Thursday that S&P Global Ratings cease applying environmental, social, and governance factors to the state through the use of what they called a politicized rating system based on indeterminate factors.
A letter to S&P signed by Gov. Spencer Cox, Treasurer Marlo Oaks, other state constitutional officeholders, legislative leaders, and Utah’s Congressional delegation, stated their objection “to any ESG ratings, ESG credit indicators, or any other ESG scoring system that calls out ESG factors separate from, in addition to, or apart from traditional credit ratings.”
(Excerpt) Read more at americanthinker.com ...
I think ESG scoring is a horrible idea. It is just a way to push wokeness into every aspect of society.
So S and P is now in the virtue rating business? Are they being run by a Pope now rather than a CEO?
https://www.nasdaq.com/market-activity/stocks/spgi/institutional-holdings?random=6267b6229a155
Check out the top three names.
Look familiar?
They should.
See my reply #4.
Kudos to him for being on the right side this time . . . but another object lesson in the fact that you can't pick up a turd by the clean end.
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