ESG-consciousness has taken the global business world by storm. In many circles the acronym has become shorthand for any environmentally minded business. But Doug McKeige, editor-in-chief of The Climate Capitalist, cautions that a stark difference lies between ESG compliance and the growth that will fuel the clean energy transition.
Environmental, Social and Governance (ESG) investing is at an all-time high, with $30 trillion in total global investment assets, which compares impressively with the market cap of the S&P 500 of $40 trillion. Many end investors have put their investment dollars to work to do good AND generate financial returns. ESG rating firms score whether a company behaves well toward the environment, its employees and other stakeholders and whether its Board of Directors and C-suite officers are aligned in how to achieve these goals. Investment managers buy these high scoring ESG stocks.
Distinguishing Between ESG and the Clean Energy Transition
ESG has significant value because companies that score well on the environment are probably working hard to cut emissions and other types of pollution, but ESG is in a different zip code than investing in the Clean Energy Transition (CET). CET means massive investments in the companies and projects that will cut fossil fuels from the four big…
