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@dmuthuk has been tweeting on SIN STOCKS & ESG (Environmental, Social, Governance) investing. The terms are being conflated.
Thread to give clarity.
Sin stocks have their roots in religion. It's only negative screening. Eg: Co's producing alcohol, cigarettes, porn, weapons
1/ https://twitter.com/dmuthuk/status/1248445545636450307
Thread to give clarity.
Sin stocks have their roots in religion. It's only negative screening. Eg: Co's producing alcohol, cigarettes, porn, weapons
1/ https://twitter.com/dmuthuk/status/1248445545636450307
It went on to human rights exclusion.
Eg: avoid companies investing in S. Africa (during apartheid) or those doing business in Sudan (during Dafur genocide).
It went on to environmental exclusion.
Eg: coal company
#ESG
2/
Eg: avoid companies investing in S. Africa (during apartheid) or those doing business in Sudan (during Dafur genocide).
It went on to environmental exclusion.
Eg: coal company
#ESG
2/
It is very subjective.
Eg. Currently, many investors will not invest in cannabis stocks due to a mismatch with personal values. After all, the industry is built around a drug with a cloudy net societal benefit at best, after all.
This is NOT #ESG.
3/
Eg. Currently, many investors will not invest in cannabis stocks due to a mismatch with personal values. After all, the industry is built around a drug with a cloudy net societal benefit at best, after all.
This is NOT #ESG.
3/
ESG is not about values
ESG is not about negative screening.
ESG is a much more holistic & inclusive investing opportunity. It relies more on positive screening than exclusionary.
Let me give an example of #ESG
4/
ESG is not about negative screening.
ESG is a much more holistic & inclusive investing opportunity. It relies more on positive screening than exclusionary.
Let me give an example of #ESG
4/
Exxon Mobil, one of the largest integrated energy companies in the world, very involved in fossil fuel related energy sources.
A shareholder resolution asked to produce an annual report on how the company contributes to climate change & how climate change is affecting it.
#ESG
5/
A shareholder resolution asked to produce an annual report on how the company contributes to climate change & how climate change is affecting it.
#ESG
5/
Shareholders saw climate change as a big financial risk. How can you analyze Exxon if you don’t consider how it's business model might be impacted by climate change? How the transition away from fossil fuels towards lower carbon intensive energy sources might impact it?
#ESG
6/
#ESG
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