Scientific Beta

The Blaze: "Goltz's conclusion was based on a study he and his colleagues conducted in which they analyzed 25 ESG scores from rating providers Refinitiv, Moody's, and MSCI. Despite massive investments in ESG funds and a global movement to promote "green" companies, Goltz and his team found that the rating systems failed to distinguish businesses with reduced carbon emissions."

The Blaze 01/08/2023

"(...) A report from the Financial Times revealed that a company's environmental, social, and governance score has "little to no relation" to its carbon emissions, noting that high-rated firms pollute just as much as low-rated firms. Felix Goltz, a research director at Scientific Beta, told the Financial Times, "The carbon intensity reduction of green [ie low carbon intensity] portfolios can be effectively cancelled out by adding ESG objectives." Therefore, Goltz claimed, "ESG ratings have little to no relation to carbon intensity, even when considering only the environmental pillar of these ratings." "It doesn't seem that people have actually looked at [the correlations]. They are surprisingly low," he added. Goltz's conclusion was based on a study he and his colleagues conducted in which they analyzed 25 ESG scores from rating providers Refinitiv, Moody's, and MSCI. Despite massive investments in ESG funds and a global movement to promote "green" companies, Goltz and his team found that the rating systems failed to distinguish businesses with reduced carbon emissions. (...)"

Read the full article: 'ESG ratings have little to no relation to carbon intensity': 'Green' companies with high environmental, social, and governance metrics pollute as much as low-rated companies, report finds', The Blaze, 01/08/2023