ESG Investing is a Scam | by Joss Biggins

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Elon was right, ESG is a scam

I am a professional money manager, and licensed CIM & RIAC. I manage a significant amount of money and represent a large number of households, all of whom consider themselves “ethical investors.” I have built a career on the concept of ethical investing, and I continue to wager my career on the evolution of ethics in wealth management.

With that context. Elon was right, ESG is a scam. ESG as it shows itself today is based on a few ideas that have been expressed very poorly, that is okay, we are early in the innovation of these concepts.

For example, the iShares Global ESG Aware MSCI ETF, will hold an abundance of companies you can instinctively know are not “ethical” & hardly “ESG aware”. If any article is talking about a quarter, or a year’s performance, understand its shortsightedness. This is speculation, not investing. ESG has been taken over by speculators in the past few years, as did BTC, or NFTs and largely the NASDAQ. We must be aware of this and as investors, move away from the crowd. When the crowd has thinned, and few remain, we must examine the principles to see if they are rooted in truth.

ESG tries to express that: we all have responsibilities as citizens, as stewards of anything in our possession, including wealth. We should act ethically not because it is aligned with a rule we must follow, but because the ethical action is the best action for us selfishly, if given time to unfold. We shouldn’t invest in ways that contribute to human suffering, to the destruction of our natural world - such would be the destruction of self. Invest in companies/sectors/humans who hold themselves to the highest standards & intentions Those who are delivering the most amount of value to the most amount of people, and who are solving the biggest problems we face as a humanity. All of this, over the longest timeframe possible.

Investors play a part in this, a small part, but a part that can be leveraged & compounded drastically through our financial systems and capitalistic framework. These are the best tools we have, in large part because they mimic nature so fundamentally. ESG won’t solve the worlds problems. It is simply expressing a school of thought around ensuring sustainability of our civilization through our businesses which considered externalities of the investments and business they own. ESG as a metric, or a theme, or a score will likely always fall short. “Not everything that can be counted counts and not everything that counts can be counted” - Einstein.

This approach is more intuitive in nature, less statistical. In many ways this approach is the feminine expressing itself, battling the masculine for a seat at the table. As is natural.

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