While inflows into ESG are surging, so is the scrutiny. The Wall Street Journal reports that the SEC is examining the criteria financial advisers use to assess ESG stocks and whether their focus on ESG clashes with the fiduciary rule. Short sellers are also taking note. Reuters reports that bears like Muddy Waters’ Carson Block, are betting against companies whose valuation may be buoyed by their strong ESG rating. Reuters’ research showed that companies with the best ESG scores have 50% higher short interest than those with the worst ESG scores.
Meanwhile, Apple is under fire for kowtowing to Beijing’s demands for taking down an app that showed locations of riot police during protests in Hong Kong. SumOfUs has asked Apple to explain about how it responds to government demands that limit freedom of expression. Shareholders will get the chance to press Apple on the human rights issue during its annual meeting next year, as the SEC denied the company’s request to block the resolution.
Finally, Financial Times columnist Michael Skapinker looked back on the year in company news, focusing on the U.S. Business Roundtable’s commitment to all stakeholders, not just shareholders. Skapinker notes that this topic is far from new, as he first wrote about it in 1989. Alas, he writes, irresponsible behavior still abounds. That said, he holds out hope for the “E” in ESG, noting that climate issues are a lasting reality that the corporate world needs to confront.
And so ends our last newsletter of 2019. We’ll be taking a short break over the holidays, resuming coverage on January 10, 2020.
We hope you have a wonderful holiday.
Gabriella and the GPP team