Major Credit Rating Agency Drops ESG Scores Amid Backlash to Corporate Wokeism
Rating agency S&P Global has dropped its use of environmental, social, and governance (ESG) scores to assess corporate borrowers amid questions over the usefulness of such metrics and amid broader backlash to “woke” agendas being pushed in board rooms across the United States.
Since 2021, the credit rating agency has rated companies on a scale from 1 (best) to 5 (worst) in each of the three components of ESG. But now, S&P Global’s ESG scoring system is being dropped in the rating agency’s credit quality assessments of publicly rated firms.
“Effective immediately, we are no longer publishing new ESG credit indicators in our reports or updating outstanding ESG credit indicators,” the rating agency announced in a statement obtained by The Epoch Times.
The rating agency hinted that lack of effectiveness was the rationale for dropping the ESG scoring system—which has been the subject of sharp criticism from conservatives who see it as a manifestation of leftist or even neo-Marxist agendas in corporations.
“We have determined that the dedicated analytical narrative paragraphs in our credit rating reports are most effective at providing detail and transparency on ESG credit factors material to our rating analysis, and these will remain integral to our reports,” S&P Global said in the statement.
A Bloomberg report citing a “person close to the process” who declined to be identified indicated that the change was prompted by “expressions of confusion” on the part of investors who rely on the agency’s credit ratings to inform their investment decisions.
A request for clarification from The Epoch Times as to why the ESG scores were being dropped wasn’t returned by press time.
‘Not That Reliable’
Patrick Welch, chief ESG and ratings policy officer at Kroll Bond Rating Agency, told Bloomberg that confusion is the likely chief culprit driving the change at rival S&P Global.
By using a five-point rating scale, “you’re putting one scoring system—an ESG one—inside another scoring system, which is the credit rating,” Mr. Welch told the outlet.
He said some of the confusion is about whether the rating reflects financial risk to the company or the company’s effect on, for example, society and the environment.
Tom Lyon, a professor at the University of Michigan’s business school who has studied ESG ratings, told the Financial Times that ESG ratings are “not that reliable, and they disagree.”
Mr. Lyon noted that ESG ratings have been under attack by conservatives and congressional Republicans while suggesting that S&P Global folded in the face of pressure to stop using them.
While S&P Global has dropped its ESG scores, its rivals Moody’s and Fitch continue to use an alphanumeric scale for their ESG assessments.
Richard Hunter, chief credit officer at Fitch Ratings, told Pensions & Investments, “Fitch believes that there are profound limits to what text disclosures can do for investors monitoring an entire portfolio of hundreds of serviced issuers and bonds.
“We have found that having a numeric score that crisply identifies individual issuers with actual rating changes that can be classified as driven by a factor which has a direct relevance for ESG as well, or where those factors are heavily discussed at the committee, without rising yet to an actual rating change, has been highly valued by users.”
‘Obsession With Radical Social Change’
S&P Global, which is one of the world’s largest raters of corporate debt, faced calls for an investigation last year by a coalition of Republican attorneys general.
“Too many consumers and investors have been hurt by the woke ESG movement’s obsession with radical social change and willingness to ignore the law,” Texas Attorney General Ken Paxton said in a statement in September 2022.
“We’re investigating S&P Global to find out whether they’ve engaged in the types of destructive, illegal business practices that are so pervasive in the ESG movement. If so, they will have to answer for their actions.”
While that investigation has yet to conclude, other experts say the pushback against ESG isn’t confined to conservatives.
Scott Shepard, a fellow at the National Center for Public Policy Research, which is a free-market public policy research group, told The Epoch Times in a recent interview that opposition to ESG is gaining steam in the United States.
“We’re seeing something very different this time. Because it’s not just the conservatives, who are always interested in this sort of thing; it’s the whole country,” Mr. Shepard said of boycott calls facing brands such as Bud Light and Target over their embrace of left-wing principles.
ESG, which started as guidelines, has now turned into heavy-handed mandates on controversial “social justice” ideologies, he said.
Mr. Shepard noted that ESG initiatives could expose businesses to legal action if they can be shown to be a breach of fiduciary responsibility to shareholders.
Will Hild, executive director of Consumer’s Research, a nonprofit consumer protection group, told The Epoch Times during a recent interview that woke business practices aren’t going away without a fight.
Corporate leaders fear losing their jobs if they drop ESG more than they fear corporate losses, Mr. Hild said. That’s why woke companies don’t seem to learn their lesson and keep pushing ESG’s “far-left agenda,” he said.
“It’s a cover for pushing politics using other people’s money,” Mr. Hild said.
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Judicial Climate Activism in Montana
In a case that would make Greta Thunberg proud, 16 young people ages five to 22 successfully sued the state of Montana for failing to protect their right to a “clean and healthful environment.” Their entire case rested upon the utterly unmeasurable and unquantifiable claim that the Treasure State’s Environmental Policy Act has “harmed” them since it precludes local officials from incorporating “greenhouse gas emissions and corresponding impacts to the climate” into their evaluation process when considering energy project approvals.
In other words, since Montana passed laws to prevent ecofascists from crushing the fossil fuel industry in the state, these children sued. Nothing like using gullible kids to promote a Marxist political agenda, which is what the climate change cult is really all about.
Indeed, given the judge’s reasoning, it was clear that these young people were merely used as props in a show trial — the outcome of which was decided before it began.
Judge Kathy Seely of the First District Court in Montana effectively based her “harm” ruling on a rationale that could be boiled down to this: The kids are so sad. Seely claimed, “Youth plaintiffs have experienced past and ongoing injuries resulting from the state’s failure to consider [greenhouse gas emissions] and climate change, including injuries to their physical and mental health, homes and property; recreational, spiritual and aesthetic interests; tribal and cultural traditions, economic security and happiness.”
Seely further enumerated, “Plaintiff’s mental health injuries stemming from the effects of climate change on Montana’s environment, feelings like loss, despair, and anxiety, are cognizable injuries.” Really? Just reading Seely’s ridiculous ruling causes feelings of despair and anxiety over the state of our nation’s judicial system.
Reading through the decision, we’re left wondering who Seely paid off to get her district judge gig. It is really that bad.
Making matters worse, while the plaintiffs had little other than feelings to offer, the state brought data and evidence to support its defense. The state even brought in world-renowned climatologist Judith Curry to back up its claims. Curry blasted the climate alarmist group Our Children’s Trust, the ecofascists behind the lawsuit, cogently observing, “There is no right to a ‘safe and stable climate,' for the simple reason that Earth’s climate is constantly out of equilibrium and evolving.”
Ignoring sound science and reasoned logic, the Leftmedia celebrated the verdict as a landmark, precedent-setting decision upon which judicial momentum can be built for furthering the Left’s war against fossil fuels.
Hopefully, however, the vacuous argument of elevating feelings as facts won’t play with the appellate courts. Children crying emotional distress over the climate change bogeyman they have been indoctrinated to fear should not sway any sober-minded judge. If it does, then a bed manufacturer could be held liable for the nightmares a child experiences over fears of the imaginary monster living under his bed.
Finally, if anyone is at fault for the emotional “trauma” these children are experiencing, is it not the Chick Little climate alarmists? People like Al Gore and Greta Thunberg have often literally screamed their apocalyptic vision of a near future world where the oceans rise and the earth burns. How many times have these charlatans claimed that earth will end in X number of years if we don’t immediately stop carbon emissions, only for the date to come and go without even a hint of remorse for the deceit they’ve peddled? And how many children suffer despair and anxiety because of this climate alarmism hysteria?
https://patriotpost.us/articles/99742-judicial-climate-activism-in-montana-2023-08-17
******************************************************Man learns unforgettable lesson about electric vehicles on 1,400-mile road trip: 'Biggest scam of modern times'
A Canadian man recently learned the hard way that electric vehicles have significant disadvantages compared to gas-powered vehicles.
On July 27, Dalbir Bala packed his wife and three children in his truck — a 2023 Ford F-150 Lightning Lariat that he purchased for $85,000 (or $115,000 in Canadian currency) in January — for a business trip to Chicago, the CBC reported.
Along the 1,400 mile trip from his home near Winnipeg to the Chicagoland area, Bala planned to stop at three charging stations. The truck's range, when fully charged, is about 320 miles.
Bala's stop at the first station in Fargo, North Dakota, was successful — albeit inconvenient because it took more than two hours to recharge the battery to 90%. But at the second station in Albertville, Minnesota, Bala discovered a charging station that did not work. After unsuccessfully calling for help, Bala drove to a nearby charging station in Elk River, Minnesota — but that one didn't work either.
With just 12 miles remaining on his battery, Bala made the decision to have his truck towed to a nearby Ford dealership, where he also rented a gas-powered Toyota 4Runner to complete his trip to Chicago. He picked up his electric truck on the return trip.
Now, Bala is telling his story and warning other consumers about the problems with electric vehicles.
"People have to make the right choices. I want to tell everybody to read my story," he told Fox Business. "Do your research before even thinking about it and make a wiser choice. ... The actual thing they promised is not even close. Not even 50%. And once you buy it, you're stuck with it, and you have to carry huge losses to get rid of that. And nobody is there to help you."
The nightmare trip is not Bala's only problem with the truck.
He explained in a social media post that not long after purchasing it, he was involved in a "minor fender bender" with a small amount of damage. Shockingly, it took six months for the damage to be repaired because of a parts shortage.
https://www.theblaze.com/news/dalbir-bala-electric-truck-road-trip
***********************************************The Barrier reef: A very expensive false alarm
In 2018, the Coalition government gifted $444 million of other people’s money to the Great Barrier Reef Foundation. The money was apparently not even asked for by the foundation, but the Decider in Chief, then-Prime Minister Malcolm Turnbull and his profligate offsider Josh Frydenberg, signed off on ‘… the record funding agreement without an open tender.’ Said Turnbull at the time: ‘So this is a wonderful investment in ensuring that we maintain the health of the Great Barrier Reef.’
The purpose of the Great Barrier Reef Foundation, according to the Great Barrier Reef Foundation is to: ‘To find and grow the best solutions to protect the world’s greatest reef.’
Meanwhile, reported this week from the Australian Institute of Marine Science’s Annual Summary Report on Coral Reef Condition: ‘In 2022, the GBR (Great Barrier Reef) continues to recover, registering the highest levels of coral cover yet recorded in the Northern and Central regions over the past 36 years of monitoring.’
To repeat. The highest level of coral cover in 36 years of monitoring across two-thirds of the reef.
This begs the question… For what was $444 million of public money provided by the Coalition government? Either the Great Barrier Reef Foundation was absolutely brilliant at saving the reef or it achieved very little and the reef repaired itself. Was this another Coalition waste of money? Looks like the latter rather than the former.
According to Peter Ridd, someone with some familiarity of the subject: ‘The reef now has twice as much coral as in 2012 when it hit a low point after being smashed by major cyclones.’ Then Ridd added: ‘The truth is we have been scammed for decades, and the perpetrators have been caught out. Once-trusted science institutions have become untrustworthy. It is time they are subjected to serious scrutiny.’
Over 4 years, we have burned through approximately $245 million to achieve … what? Whatever it is, it is difficult to quantify. With this spending you’d think this project was part of the Department of Defence!
The final and most important question to ask then is … can we have the money back?
https://www.spectator.com.au/2023/08/can-we-have-that-444-million-back/
***************************************My other blogs. Main ones below
http://dissectleft.blogspot.com (DISSECTING LEFTISM )
http://edwatch.blogspot.com (EDUCATION WATCH)
http://pcwatch.blogspot.com (POLITICAL CORRECTNESS WATCH)
http://australian-politics.blogspot.com (AUSTRALIAN POLITICS)
http://snorphty.blogspot.com/ (TONGUE-TIED)
http://jonjayray.com/blogall.html More blogs
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Jim Hansen and his twin
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