Natalie Pace. bestselling author of The Gratitude Game, The ABCs of Money & Put Your Money Where Your Heart is. Co-creator of the Earth Gratitude Project.
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The Dirty Truth About ESG investing: It’s Missing the E.

20/5/2022

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​Tesla very famously was booted out of the S&P Global’s E.S.G. Index on May 17, 2022. S&P Global explained their decision in a blog, writing, “While Tesla may be playing its part in taking fuel-powered cars off the road, it has fallen behind its peers when examined through a wider ESG lens.”

Elon Musk responded with a series of Tweets calling the index a “scam,” and noting that Exxon Mobil was in the index. He also shared the above Tweet mentioning that there are 6 oil companies in the index. (There are actually at least 15 oil and gas companies in the index.) Is oil the only dirty little secret of E.S.G. investing? Would Mother Nature be including the companies that S&P Global has chosen for their ESG index? What about those self-proclaimed “socially conscious” funds?
 
ESG is the hot new way of investing. The acronym wraps environmental, social and governance factors into one blanket, offering climate-action and socially-conscious investors a feel-good idea for growing their wealth. However, a look into the actual holdings of these funds reveals that the “E” is missing.  
 
Fossil Fuels
Just 20 of the world’s largest fossil fuel companies are responsible for over 1/3 of the CO2 in the atmosphere. Over half of each barrel of oil is used to make plastic, polyester, asphalt, rubber and other petrochemical products. The S&P Global’s E.S.G. Index includes 15 oil companies and 15 plastics, petrochemicals, and single-use waste-generating companies. If we add in the gasoline-powered automobile companies, airlines and cruise ships (heavy CO2 footprint) and the plastics and petrochemical companies, the number of problematic CO2 companies on the ESG list jumps to at least 30 – about 10% of the list. Add in the environmental impact of biotechnology and mining, which are both hard on our home planet, and the percentage jumps to 20%.
 
The self-described socially conscious fund companies always include banks (which fund oil and other environmentally-toxic businesses), consumer products (many of which promote single-use plastic or paper waste) and even some traditional (gas-guzzling) automotive companies.
 
Plastic and Forest-Clearing
Less than 10% of plastic was recycled in the U.S. Forests are being cleared for toilet paper and single-use paper waste. The NRDC publishes a Report Card assigning high marks to companies that are using recycled paper for their products, compared to companies that are clearing old-growth forests, which their customers are flushing down toilets.
 

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Single-Use
Many companies in the ESG and socially conscious funds have a single-use, waste problem. Since recycling isn’t happening, it’s important to focus on the first 5 of the 6 Rs of sustainability – Rethink, Refuse, Reduce, Repair, Reuse. That means that all of us need to pack our water canteen, canvas bags/backpack and reusable coffee mugs on our errand runs (ideally locally, on a bike).
 
Petrochemicals, Dead Zones and Health Hazards
The Dead Zone in the Gulf of Mexico results from toxic agricultural run-off from industrial farms along the Mississippi River. There is a Cancer Alley in Louisiana, due to the amount of oil and petrochemical refineries in the region. Long-term pesticide exposure increases the risk of diabetes, according to studies by the NIH.
 
Bottom Line
The truth about ESG and socially conscious investing is that many of these funds are missing the environmental filter that their clients are relying upon. Whether or not they live up to the SG is for a separate analysis. Mother Nature would be canning at least 30 companies that are included in the S&P Global ESG Fund (probably double that amount), if she were creating an environmentally-conscious fund. Don’t be misled by the fancy title, which is a clear case of false advertising. If you care about the environment and you don’t have time to dig into all of the holdings of the funds, E.S.G. investing is just too CO2 for clean hands.
 
If you’re interested in healing our planet, take our challenge to reduce your personal CO2 footprint by 30% this year. Learn more in The Power of 8 Billion: It’s Up to Us.


If you'd like to learn how to green your investments, while also adopting 21st Century time-proven investing strategies for protecting your wealth (from a No. 1 stock picker), join us for our June 10-12, 2022 Financial Freedom Retreat. Email info@NataliePace.com or call 310-430-2397 to learn more and to register. Click on the banner ad below to discover the 18+ strategies you'll learn and master. 
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Join us for our Financial Freedom Retreat. June 10-12, 2022. Email info@NataliePace.com to learn more. Register with friends and family to receive the best price. Click for testimonials & details.


PictureNatalie Pace learning organic farming tips from David Wilson, the Home Farm manager of H.R.H. The Prince of Wales.
Natalie Wynne Pace is an Advocate for Sustainability, Financial Literacy & Women's Empowerment. Natalie is the bestselling author of The Power of 8 Billion: It's Up to Us and is the co-creator of the Earth Gratitude Project. She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). Her book The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical), with over 120,000 downloads and a mean 5-star ranking. The 5th edition of The ABCs of Money was released on September 17, 2021. 
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Natalie Pace's easy as a pie chart nest egg strategies earned gains in the last two recessions and have outperformed the bull markets in between. That is why her Investor Educational Retreats, books and private coaching are enthusiastically recommended by Nobel Prize winning economist Gary S. Becker, TD AMERITRADE chairman Joe Moglia, Kay Koplovitz and many Main Street investors who have transformed their lives using her Thrive Budget and investing strategies. Click to view a video testimonial from Nilo Bolden.


Check out Natalie Pace's Podcast on Spotify.
Watch videoconferences and webinars on Youtube.

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Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.
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    Natalie Pace is the co-creator of the Earth  Gratitude Project and the author of The Power of 8 Billion: It's Up to Us, The ABCs of Money, The ABCs of Money for College, The Gratitude Game and Put Your Money Where Your Heart Is. She is a repeat guest & speaker on national news shows and stages. She has been ranked the No. 1 stock picker, above over 830 A-list pundits, by an independent tracking agency, and has been saving homes and nest eggs since 1999.

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  • Books by Natalie Pace.
  • Real Estate Master Class
  • Stock Master Class
  • Options for Beginners Master Class
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  • Natalie Pace England Financial Freedom Retreat.
  • Natalie Pace Coaching Calendar
  • Natalie Pace April 22-24, 2023 Financial Freedom Retreat. Online
  • Bond Master Class
  • Rebalancing Your Wealth Plan April 29, 2023Master Class