ESGs ( 21.6.24 )

1. ESGs: Investigations with Climate Change Being a Sustainability Awards, the term "socially responsible investing" (SRI) refers to the trend in which an increasing number of individual investors are thinking about and taking part in attempts to align their asset portfolios with their political or social ideals. While there are many different ways that SRI can be used, and has been used in the past, such as avoiding investing in businesses that produce and distribute addictive chemicals, some have recently tried to accomplish social investment by investing in companies with high ESG ratings. The United Nations invited 50 major financial institutions to participate in a "joint initiative" in 2004, which gave rise to the notion of ESG. ESG assigns grades to publicly traded firms based on their performance and policies related to environmental, social, and governance issues. These areas include labor practices, employee diversity, board transparency, pollution, business climate initiatives, and Laboure practices, among other criteria. In our opinion as ESG Award, Regarding the total money under management, ESG investments have consistently broken previous records in the last few years. Worldwide ESG assets under management (AUMs) exceeded $35 trillion in 2020 (up roughly 15% from the end of 2018 and 33% from the end of 2016). This represents a third of all global AUMs, and predictions suggest they will top $50 trillion by 2025. The United States owns 13% of these companies, with Europe accounting for 94% of the concentration. There are reasons to be highly cautious when determining socially responsible investment methods when employing ESG ratings, even though it seems like a popular way to achieve SRI. It’s crucial to note that a high ESG rating doesn't always translate to a strong investment holding, despite the potential for sustainability demonstrated by highly rated ESG companies’ ratings can be misleading when it comes to boosting investment returns, as evidenced by a joint study by professors from the London School of Economics and Columbia Business School. We are an ESG Awards, the study found no evidence of ESG investment funds outperforming non-ESG funds and revealed that ESG funds had a higher rate of Laboure and environmental infractions compared

2. to non-ESG companies. From a financial and ESG perspective, there are no additional benefits associated with ESG-based investing over non-ESG-based investing. The Climate and ESG Taskforce was established by the Securities and Exchange Commission (SEC) in 2021 to " proactively identify ESG-related misconduct" due to the inaccuracy of ESG ratings and improper rating allocation. The seriousness of the damage that ESG ratings may do is demonstrated by the SEC's task force, which was formed specifically to root out misbehaviors. ESG funds, according to Professor Theo Vermaelen, deceive prospective investors by advertising that their contributions will "(1) reduce global warming and (2) do this without giving up returns." To help you as Sustainability Award, the main problem is that an organization's ESG rating must frequently correspond to its climate initiatives or ensure profitable investment returns. Professors Robert F. Stambaugh, Lucian A. Taylor, and Lubis Pastor developed a model that predicted that ESG assets, or green assets, will "underperform" non-ESG assets "over a sufficiently long period." Given that an ESG score is assigned to corporations based on a weighted scale at the firm's discretion, the companies are not guaranteed to adhere to the rules. Furthermore, the ESG ratings could be more trustworthy in and of themselves. Many businesses have good social and environmental scores despite a history of poor labor practices, violations of human rights, or dubious ecological effects. The SK Group and the failure of the dam they constructed in Laos serve as a prime illustration. In our role as ESG Award, the parent company, SK Inc., had an MSCI ESG score of BBB before the disaster. There was no change in the parent company's score after the collapse that resulted in thousands of displaced persons and at least 70 deaths. Instead, MSCI raised the score to A three months after the accident. Compared to the highest MSCI score of AAA, the parent company now has an AA ranking. An increasing number of people who want to align their portfolios with their social beliefs are turning to ESG investing as a trendy financial strategy. Although ESG ratings provide a valuable tool to do this, investors who want to build a sustainable portfolio should notice their drawbacks, including lower investment returns and deceptive results and marketing. ESG ratings should be viewed as just another type of mass marketing that companies employ to entice investors, at best.