“Companies in the S&P 500 SPX with high ESG ratings actually produced 12% more carbon emissions than their lower-rated industry peers, report professors Panos Patatoukas of UC Berkeley’s Haas School of Business and Jinsung Hwang of the Hankuk University of Foreign Studies in Seoul, South Korea… The reason for this? ‘ESG assessments reward disclosure practices and management processes rather than actual environmental outcomes,'”

[COMMENTARY] Now this is an interesting finding! Since I believe this is the first study to report this outcome, it needs to be replicated by other outside researchers. However, if the findings are replicated, then ESG rating organizations need to rethink their ESG scoring systems. Also, what about fund managers and investors? How should they respond?
If you want to invest in helping the environment, don’t bother with ESG funds, by Brett Arends, January 15, 2026, Morningstar, USA.