The world’s 20 largest ESG funds hold an average of 17 fossil-fuel producers, with six of those funds having invested in ExxonMobil, the biggest of America’s Big Oil companies. Two others own stakes in Saudi Aramco, the world’s biggest oil producer. Another holds an interest in a Chinese coal-mining company. These are the findings of a research project conducted by The Economist.
Why would ESG funds be in league in oil and coal enterprises (and even the purveyors of gambling, booze and tobacco products and services)? It’s called “greenwashing,” the conveying of false or misleading information suggesting a company’s products and activities are environmentally sound. The practice is rampant and for the most venal of reasons: There is huge demand among investors for positions in ESG funds, so much so that inflows into ESG funds accounted for about one-quarter of the total, up from just one-tenth in 2018, again according to The Economist. On averag