March 6, 2020

Misleading ESG criteria

Investors who consider environmental, social and governance aspects in their investments often use the ESG (Environment, Social, Governance) ratings of official rating agencies. But these ratings are anything but straightforward, as Obermatt CEO Dr. Hermann J. Stern points out in the second part of his oikos conference '19 Keynote at the University of St. Gallen.

Stern derives this insight from an exercise with students, which is documented in this video. Watch the video and answer the questions for yourself. You will see that your opinion is often not in line with the official ESG ratings.

The presentation also makes it clear that there is hardly any consensus on ESG issues and - even worse - that ESG rating agencies not only disagree with each other but these agencies interpret the same information in very different ways, leading to conflicting ratings.

Conclusion: ESG criteria must be interpreted by you and can only be used meaningfully in your own direct investments because ESG funds are hardly what they promise. The Obermatt focus markets make a direct investment in ESG stocks easier.

Recorded by Obermatt with kind permission of oikos St. Gallen, November 2019.

We buy the stocks we discuss and openly publish the returns of our portfolio. That's how much we believe in our stock research. Subscribe to the top 10 stocks for 100 markets conveniently by e-mail.

Get stock news now
Analysis drives Performance