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Damodaran: ESG purveyors are “sanctimonious and arrogant twits”

Ahead of COP26, we put some questions to the ESG sceptic Aswath Damodaran
Damodaran: ESG purveyors are “sanctimonious and arrogant twits”

Famed academic Aswath Damodaran is best known to investors for his work on stock market valuation. He is also deeply sceptical of the environmental, social and governance (ESG) movement. In September, the professor of finance at NYU's Stern School of Business outlined his objections to what he termed the “goodness gravy train”, suggesting there is dubious evidence for the positive impact of ESG, and that it has essentially become a marketing gimmick

Damodaran’s main conclusions are that: 1) Goodness is difficult to measure (and the task won’t get easier); 2) Being good will add value to some companies, hurt others and leave some unaffected; 3) The ESG sales pitch to investors is inconsistent and incoherent; 4) Outsourcing conscience via investments isn’t a solution.

Summing up, Damodaran wrote: “The ESG movement’s biggest disservice is the message that it has given those who are torn between morality and money, that they can have it all”. Ahead of COP26, in which ESG commitments are likely to come thick and fast, we put some further questions to the professor.

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