So, what are the lessons for everybody else?
First, be aware of what Goldberg calls “the hidden BDS campaign.” Much of BDS is open and explicit, but its influence in the ESG realm has not been.
Second, Marc Stern, chief legal officer at the American Jewish Committee, observes that sources matter: “Take slanted information and take it at face value, you’ll come out with slanted evaluations.” Investors should ask what sources an ESG rating provider is using. As is now clear, hidden assumptions built into corporate ratings may not be so neutral.
Third, Stern notes, “Social justice is not self-defining. If you ask people to have more social justice considerations in running companies, they should lay out clearly what that means and how they’ll deal with situations of conflicting views of social justice.” This particularly matters now, as “the SEC [U.S. Securities and Exchange Commission] has rules out to encourage more ESG disclosure.”
Fourth, Goldberg recommends that anyone concerned about these developments “ask your state treasurer and attorney general to raise these issues. Ask your member of Congress to raise the issue with the SEC, and make sure your state legislators and governors are enforcing the state’s anti-BDS laws where
they exist.”
Fifth, with ESG’s rising popularity, Stern believes that when organizations like Human Rights Watch issue full-length reports on Israel, dissenters should “rebut them point by point; have something to go to pension funds with.”
Finally, Goldberg advises states with relevant anti-BDS laws and pension funds beyond Illinois to investigate whether they have unwittingly divested from Israel. Relatedly, Goldberg suggests state treasurers “ask [firms] upfront, ask them who their sources are, because they’re asking for a lot of your money.”
ESG offers investors an opportunity to feel like they’re doing good in the world, but there can clearly be a gap between theory and practice. Let the investor beware.
(full article online )
What happens when the firms handling environmental, social, and governance ratings are themselves biased?
thedispatch.com
www.israellycool.com
