The End of ESG

ESG is important because it drives long-term value, but it is not special compared to other intangible assets like management quality and corporate culture.

Therefore, it should not be treated as a niche area and should not be given special treatment. Companies should not be praised solely for improving their ESG performance, and investors who greenwash should be held accountable, as well as those who fail to walk the talk. Practitioners should not rush to create specialized rules for ESG factors, such as tying executive pay to them or forcing companies to report on them if not relevant. Lastly, controversies surrounding ESG become moot when viewed as a set of long-term value factors, as reasonable people can disagree on the relevance of certain characteristics for a company’s success.

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●The end of ESG.