Jun. 13, 2022
This trend towards even more stringent ESG disclosures may have merit for investors seeking specific companies and their impact. However, I do not believe a company can, or should, forgo profit to attain high score in a system that was simply devised for marketing purposes. This business of “climate change” is still a science in its infancy, and subject to a high bias by political factions. Today, the “whipping boys” of public companies are the oil companies. It would be extremely difficult, if not impossible, for that industry to score very high in a system that has an inherent bias against them. Go back 10 years and the tobacco companies were the evil empire, until individual states figured out they would be bankrupt without the money tobacco bonds provided. Where will this trend go next? I think the “Inconvenient Truth” has proven to be an inconvenient lie. Are we really going to be honest and expose how Tesla’s demand for lithium is creating an ecological mining nightmare? Open pit mining on steroids. I really doubt it, since those cars are the darlings of the ESG industry. I don’t disagree with having a uniform framework for evaluation, but moving beyond current disclosures is unwise and unnecessary. This next step of disclosures that includes corporate travel and items a corporation has virtually no control over, makes no sense. Enough is enough! Frankly, I am waiting to see how prison stocks might fare in this latest round of disclosures! After all, their clientele does not need to travel to the place of business……they are there 24/7. No tailpipe emissions there! Social responsibility? Let’s give them a top score for keeping all the bad actors out of society and protecting us! Move on to something that has real value, like fraud. While you are wasting time and resources with this biased scoring system, the next Bernie Madoff is out there brooding at his desk and dreaming of riches. Michael Milken? LTCM? Thank you for your time. Bill Johnson AG Edwards (retired)