What if we told you that tobacco companies do in fact receive a high ESG-score?
An interesting Opinion on ESG methodologies was recently publishing in the Danish financial news media; Børsen. Along Kristoffer Nilaus Tarp (director for sustainability at Advice), Charlotte Skovgaard (adm. director at Merkur Andelskasse) and Jakob Lage Hansen (founder and director of Doland), Matter's CEO and Co-Founder, Niels Fibæk, mentioned the complications of which the main criticism of ESG ratings is based on - tobacco companies being the perfect example.
Certainly, one would assume a tobacco company would not be able to score high on an ESG rating. However, according to traditional metrics, they can easily receive a higher score as long as their corporate processes are optimised for the metrics of the traditional ESG values - regardless of their main product or service.
Comments on this issue are quoted from the Børsen article's original language (in Danish):
"Der er en tendens til, at ESG-måling (og andre typer bæredygtighedsmål) ofte fokuserer på at begrænse negative bidrag, såkaldt 'do no harm', snarere end at forstå om en virksomhed yder et positivt bidrag til den bæredygtige omstilling. Derfor kan der ikke sættes lighedstegn mellem gode ESG-ratings og virksomheder eller produkter, der gør social eller miljømæssig gavn."
The solutions that we offer at Matter spans from a powerful analytics platform to seamlessly integrated APIs, but regardless of the solution, the robust Matter data is ultimately what makes it possible to reach a more transparent sustainable investing landscape.
Click here if you wish to learn more about us, our mission, and role in the industry.
An interesting Opinion on ESG methodologies was recently publishing in the Danish financial news media; Børsen. Along Kristoffer Nilaus Tarp (director for sustainability at Advice), Charlotte Skovgaard (adm. director at Merkur Andelskasse) and Jakob Lage Hansen (founder and director of Doland), Matter's CEO and Co-Founder, Niels Fibæk, mentioned the complications of which the main criticism of ESG ratings is based on - tobacco companies being the perfect example.
Certainly, one would assume a tobacco company would not be able to score high on an ESG rating. However, according to traditional metrics, they can easily receive a higher score as long as their corporate processes are optimised for the metrics of the traditional ESG values - regardless of their main product or service.
Comments on this issue are quoted from the Børsen article's original language (in Danish):
"Der er en tendens til, at ESG-måling (og andre typer bæredygtighedsmål) ofte fokuserer på at begrænse negative bidrag, såkaldt 'do no harm', snarere end at forstå om en virksomhed yder et positivt bidrag til den bæredygtige omstilling. Derfor kan der ikke sættes lighedstegn mellem gode ESG-ratings og virksomheder eller produkter, der gør social eller miljømæssig gavn."
The solutions that we offer at Matter spans from a powerful analytics platform to seamlessly integrated APIs, but regardless of the solution, the robust Matter data is ultimately what makes it possible to reach a more transparent sustainable investing landscape.
Click here if you wish to learn more about us, our mission, and role in the industry.
