“Ethical Markets is participating in the overdue debate on the future of ESG ratings and the hundreds of ETFs and theme portfolios using these various ESG metrics. This report on the 20 years of ESG ratings provided by the FTSE4Good is contrasted with the ESG ratings of the US-based MSCI metrics, which is the focus of the penetrating article in Bloomberg Business Week “The ESG Mirage“ deeply researched by Akshat Rathi and others.
In this article, MSCI and its ESG ratings are critiqued as having descended into mere branding and marketing tools to justify higher fees for ETFs with ESG and “sustainability” labels. Do not miss this upcoming competition across the Atlantic! We take it further in my article circulating among our financial colleagues: “ESG Stakeholder Capitalism and China’s Common Prosperity?”, in which I describe the contrasting cultures of the world’s two superpowers, China and the USA and how they are trying to curb the over-reach of greedy markets and billionaires in both countries.
We are still collating comments, and more are welcome!
~Hazel Henderson, Editor“
The benchmark that set ESG standards
One of the world’s longest running sustainable investment index families, FTSE4Good index series began in 2001, and is a series of best-in-class sustainability indexes comprised of companies that meet a variety of environmental, social, and governance standards. These thresholds are designed to become more stringent over time, based on a transparent process and guided by an independent committee of experts.
Two decades later the capital markets and investment approaches have changed beyond recognition. Financial institutions around the world now incorporate sustainability into their philosophy and processes as a matter of course.