No Mercy / No Malice: Mammon

ESG Branding

ESG, which stands for environment, society, and governance, is often used more as a branding tool than a genuine investment strategy. George Hahn highlights how ESG has become a fashionable label for multinationals, masking the reality that it is more about image than substance. He questions whether corporate ESG scores are improving due to genuine progress or simply because the standards are being lowered 1.

ESG is neither an investment strategy nor altruism, it's branding.

--- George Hahn

The movement is losing traction as investors become aware of its superficial nature, leading to significant withdrawals from ESG funds 1.

   

Investment Returns

The performance of ESG investments is often comparable to traditional funds, revealing the hollowness of their promise. George Hahn points out that the returns of the S&P 500 and the S&P 500 ESG index are nearly identical, which is by design 1. This similarity in performance, coupled with higher expense ratios for ESG funds, underscores the branding aspect of ESG investing.

The hollowness of ESG investing is reflected in its returns, which are neither good nor bad, but average.

--- George Hahn

As investors catch on to this reality, the decline in ESG fund investments is becoming more pronounced 1.