The holes in holistic ESG indices
Suppose you had to balance each of your acquaintances’ pros and cons — were they generous, quick to anger, patient with children? — and choose the “best”. The idea is off-putting, and the thought of assigning individuals a “score” encompassing their every character trait is extremely off-putting. S&P Global has run into this sort of minefield in crafting its S&P 500 ESG index. This is a selection of the best (corporations, of course, not people) in which Tesla, which has done more to reduce fossil fuel consumption than arguably any other company, was excluded, and ExxonMobil made the list.
Photo credit: Andrea Renault/AFP/Getty Images
