The ESG lie

One trend that I am fascinated with is the rise of ESG funds and investment opportunities. It’s apparently the new hot investment trend among millennials and Gen Z.

I love the idea of ESG, but absolutely hate the execution of it. The reality is that most investing in ESG is investing in garbage that provides no societal benefit.

Many of the ESG ETFs and funds launched are simply broad based indexes with higher fees. ESG is something that is not defined so you very well could end up investing in a company like Microsoft which many likely wouldn’t consider ESG.

Furthermore, it’s largely been a ploy for managers and advisors to charge clients higher fees for placing clients into ESG funds and investments. Often times, there’s subpar performance that accompanies these higher fees.

Lastly, buy shares in an even legitimate “ESG” company does not necessarily mean that you’re making any meaningful contribution to any ESG causes. I’d imagine there’s some debate on this topic which I may want to write about in the future.

I’m sure there are some legitimate ESG funds out there, but at this point, I think it’s a bullshit trend that needs to stop. Folks who want to make more of an impact should be looking to donate or volunteer their time instead. That could be some real material impact.