“Investors’ trust in ESG funds may be misplaced. As scholars in the field ofsupply chain managementandsustainable operations, we see a major flaw in how rating agencies, such as Bloomberg, MSCI and Sustainalytics, are measuring companies’ ESG risk: the performance of their supply chains.”
[COMMENTARY]The issue of supply chains is coming to the fore! The reason why ESG rating companies have largely ignored it is because it’s complex, difficult — and costly to evaluate. My guess is until a way is found to cover such increased costs, fully including supply chain issues into ESG scores will be mixed at best.
ESG investing has a blind spot that puts the $35 trillion industry’s sustainability promises in doubt: Supply chains, by Tinglong Dai and Christopher S. Tang, November 9, 2021, The Conversation, Canada.