02-08-2023, 08:09 PM
Everyone focusing on the environment aspect of it (which is what most everyone cares about) but there are a few key points being missed here.
1) First and foremost, there is no standard. is Nike a good company or bad company? Some will say they do great with social justice and it's an easy yes, others will cite offshore labor practices and say it's bad. It's all subjective. I saw an example on the internet a few weeks ago that had Pfzier being a negative company with Moody's, slightly above average company with Standard and Poors, and great company with CSRHub. Who's right?
Source for ratings: https://reason.org/commentary/esg-investing-is-bad-for-the-economy/ (you can read the article if you want, i'm just linking it for the chart)
2) ESG investing adds risk to a fund. All it does is reduce options....you don't like AT&T or Verizon's political contributions? No longer an option for the fund. You don't like how much a CEO makes or how diverse their board is? Again, eliminated. So no, it's not a positive for diversification as someone mentioned earlier.
3) These investing practices should be disclosed. It's one thing if you decide to put your 401k/IRA in like say....Vanguard's Social Index Fund...you know exactly what the fund manager is targeting because it's in the disclosures (which by the way that fund is underperforming over the last year compared to the rest of the market
) but when it's not in the disclosures and the fund managers are just making those decisions, then they no longer have their clients best interests in mind.
4) We're talking about (mostly) retirement accounts. Someone commented earlier about how it's a trivial percent and said 1.5% difference. (It's much higher than that) but even if it was 1.5%....i'm sorry but 1.5% missed out every year for 40-60 years is a shit ton of money not in your retirement account. Nobody wants to work until they're 70 or 65 or whatever it is....but that difference will end up being huge.
1) First and foremost, there is no standard. is Nike a good company or bad company? Some will say they do great with social justice and it's an easy yes, others will cite offshore labor practices and say it's bad. It's all subjective. I saw an example on the internet a few weeks ago that had Pfzier being a negative company with Moody's, slightly above average company with Standard and Poors, and great company with CSRHub. Who's right?
Source for ratings: https://reason.org/commentary/esg-investing-is-bad-for-the-economy/ (you can read the article if you want, i'm just linking it for the chart)
2) ESG investing adds risk to a fund. All it does is reduce options....you don't like AT&T or Verizon's political contributions? No longer an option for the fund. You don't like how much a CEO makes or how diverse their board is? Again, eliminated. So no, it's not a positive for diversification as someone mentioned earlier.
3) These investing practices should be disclosed. It's one thing if you decide to put your 401k/IRA in like say....Vanguard's Social Index Fund...you know exactly what the fund manager is targeting because it's in the disclosures (which by the way that fund is underperforming over the last year compared to the rest of the market
) but when it's not in the disclosures and the fund managers are just making those decisions, then they no longer have their clients best interests in mind. 4) We're talking about (mostly) retirement accounts. Someone commented earlier about how it's a trivial percent and said 1.5% difference. (It's much higher than that) but even if it was 1.5%....i'm sorry but 1.5% missed out every year for 40-60 years is a shit ton of money not in your retirement account. Nobody wants to work until they're 70 or 65 or whatever it is....but that difference will end up being huge.
