The most vital letter in ESG ratings is not what you might think

Photo of Trey Thoelcke
By Trey Thoelcke Published
The most vital letter in ESG ratings is not what you might think

© Lukas Schulze / Getty Images News via Getty Images

By David Callaway, Callaway Climate Insights

(Mark Hulbert, an author and longtime investment columnist, is the founder of the Hulbert Financial Digest; his Hulbert Ratings audits investment newsletter returns.)

CHAPEL HILL, N.C. (Callaway Climate Insights) — Climate-friendly investors need to pay more attention to the “G” in “ESG.”

I’m referring to the “Governance” dimension of socially responsible investing that goes by the acronym ESG. The other two dimensions, of course, are Environmental and Social. Most climate-focused investors focus only on the “E” and ignore the “G” dimension altogether.

That may be a big mistake, according to a recent study into which companies have made the most progress over the years in reducing their emissions of greenhouse gases (GHGs). The study’s authors found that an increased “G” rating was correlated with a reduced growth rate of GHG emissions, on average. In contrast, there was no detectable statistical correlation between changes in companies’ “E” ratings and changes in GHG emission growth rates. . . .

To read this column, all our insights, news and in-depth interviews, please subscribe and support our great climate finance journalism.

Callaway Climate Insights Newsletter

Photo of Trey Thoelcke
About the Author Trey Thoelcke →

Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.

Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community. He previously oversaw the 24/7 Climate Insights site, managing editorial operations and content strategy, and currently oversees and creates content for My Investing News.

Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.

Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, overseeing a long-running critique group and moderating workshop sessions at regional conventions. He lives with his family in an old house in the Midwest.

Continue Reading

Top Gaining Stocks

DELL Vol: 42,366,555
NTAP Vol: 15,911,807
NOW Vol: 68,243,561
IBM
IBM Vol: 28,527,546
HPE Vol: 86,996,387

Top Losing Stocks

CTRA Vol: 73,319,495
CLX Vol: 4,744,001
RMD Vol: 3,526,686
INTC Vol: 191,680,425
SWKS Vol: 5,407,806