Scientific Beta

The Asset: "A recent paper published by data provider Scientific Beta, written by the its ESG and low carbon investment specialist Erik Christiansen and ESG director Frédéric Ducoulombier, underscores the danger of using average overall scores at the portfolio level, whether for investment or reporting decisions. “In very concrete terms, the “E” dimension promoted by global ESG scores leads to decisions that may favour companies that have a considerable impact on greenhouse gas emissions," say Christiansen and Ducoulombier in their study."

The Asset 21/12/2020

"(...) A recent paper published by data provider Scientific Beta, written by the its ESG and low carbon investment specialist Erik Christiansen and ESG director Frédéric Ducoulombier, underscores the danger of using average overall scores at the portfolio level, whether for investment or reporting decisions. “In very concrete terms, the “E” dimension promoted by global ESG scores leads to decisions that may favour companies that have a considerable impact on greenhouse gas emissions," say Christiansen and Ducoulombier in their study. "More generally, the lack of consistency between the “E” score and the climate dimension favors greenwashing." Scientific Beta highlights the additional concerns linked to averaging ESG scores across a portfolio and using such an average as a goal or constraint in portfolio construction. Portfolio optimizations based on average ESG scores magnify the estimation errors of individual ESG scores. (...)"