“A feel-good scam that is enriching consultants, measurement services and fund managers, while doing close to nothing for the businesses and investors it claims to help, and even less for society.”
Acclaimed valuation expert and New York University finance professor Aswath Damodaran is not a fan of ESG (environmental, social, and governance) investing. Damodaran tore into ESG in a lengthy blog post last week, arguing the recent corporate exodus from Russia is not evidence of ESG’s merits.
Firstly, ESG measurement services like Sustainalytics missed the “Russia effect”, says Damodaran, with Russian companies like Sberbank, Lukoil and Yandex all ranked in the top quartile of their industry groups prior to the Ukrainian invasion.
Secondly, most companies pulling out of Russia had little business there anyway, as Russia only accounts for 2 per cent of the global economy.
Besides, investing in Russia is risky for multiple reasons; it’s easy to pick the moral path “when economics and morality converge”.
Would…
