What’s wrong with ESG Investing? — Market Mad House

Ethical people need to be skeptical of Environmental, Social and Governance Investing (ESG) or ESG Investing.

In theory, ESG investors only buy companies with high ethical standards. For example, companies that do not burn fossil fuels, abuse or exploit customers, or mistreat employees.

However, many ESG funds and recommendations contain companies that engage in unethical practices. For example, the Xtrackers MSCI USA ESG Leaders Equity (USSG) ETF contains Johnson & Johnson (NYSE: JNJ) and the Walt Disney Company (NYSE: DIS).

Some Unethical ESG Investments

For example, a New York State jury alleges Johnson & Johnson sold baby powder that contained asbestos to people.

In addition that jury claims the asbestos caused cancer in some women, Asbestos.com claims. Therefore, Johnson & Johnson’s ESG status is debatable.

Meanwhile, the Working for the Mouse survey of 5,000 Disneyland employees alleges that 74% of Disneyland cast members do not earn a living wage, Newsweek claims. In detail, Working for the Mouse fund 85% of Disneyland Resort employees earn under $15 an hour and over 50% of Disneyland employees make less than $12 an hour.