Posted on 07/13/2022 4:15:53 AM PDT by MtnClimber
Proxy advisors are the hidden force behind the rise of the ESG movement and its morph into a large-scale grift where American companies and investors are the victims. This little-known industry, dominated by Institutional Shareholder Services ("ISS") and its smaller competitor Glass Lewis, has fundamentally changed ESG.
What began as a public relations and marketing effort for corporations to show employees and customers they are responsible actors now functions as a corporate credit score where those who refuse to play the game are denied access to investor capital. Publicly traded companies have often been slow to fully understand the power of proxy advisors and their affiliates to materially harm shareholder value by merely issuing an ESG rating downgrade.
According to the Forum for Sustainable Investment, approximately $17.1 Trillion US investor dollars are invested under so-called "sustainable" investment strategies, which consider ESG ratings. Therefore, a downgrade in a company's ESG ratings from a "B" to a "C" would materially impact the stock price in the same way as a credit downgrade from Moody's.
Given the power of these ESG ratings, publicly traded companies and retail shareholders must have direct access to how these ratings are calculated. Unfortunately, proxy advisors call that information proprietary and refuse to disclose it. Where they do provide information on their metrics, their metrics leave themselves open to lots of qualitative judgments, which can be abused.
Even more troubling is that Institutional Shareholder Services currently has a significant potential conflict of interest. They provide ESG ratings and a consulting business that helps public companies improve their ESG ratings. Investors may suffer from wrongly investing in companies who have high ESG ratings because they paid for consulting rather than because they are good corporate citizens. Anglo American Plc, the parent company of the infamous De Beers Group known
(Excerpt) Read more at americanthinker.com ...
I think there should be lawsuits for fiduciary malpractice against the whole ESG structure.
Maybe it’s time to put an end to a lot of the regulatory nonsense entirely. I made two important life-changing career decisions over the years because I absolutely refuse to work for a publicly traded company in my industry.
ESG is just a branch of global Marxist tyranny.
That is it. Nothing more.
Maybe companies need to just stop playing that game. If all would get together and decide they won’t participate. Yeah, I know....hahahahah.
50 years too late.
All started with the deal between AT&T and Nixon DoJ giving teeth to the EEOC (Eventual Elimination Of Caucasians) and acceptance of Affirmative Action.
In other words, the rating companies are engaged in a protection racket, much like the black “racism consultants” do.
Seems like a bargain-hunting opportunity to invest in low-rated companies.
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