Why the Gravest Human Rights Abuses Do Not Show Up in Esg Scores

By Mike Head, Senior Adviser to The Justice Company

When a fund explicitly includes ESG in its name, it is reasonable to assume that environmental, social and governance considerations are the starting point. You would expect the social umbrella to cover the gravest social concerns and treat them as non-negotiables. 

That expectation is not unreasonable. It is, in fact, the minimum that the label implies. Yet, the world’s most serious human rights abuses — genocide, apartheid, occupation — consistently fail to count as obstacles in many ESG scores. A company can score highly on ESG because it is well run, even while remaining materially connected to activities that many investors would consider a fundamental red line.

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