I am worried about foreseen and unforeseen consequences that may come from investing in ESG since the phenomenon has only gained significant notoriety within the past 5 years. Does anyone knowledgeable have any insight as to what potential hurdles would be?
There’s evidence that companies may publicly embrace ESG as a way of diverting attention away from poor business performance. Research has shown that when a firm underperformed earnings expectations, it often publicly talked about its focus on ESG. But when they exceeded expectations, they made few, if any, public ESG remarks.