ESG Is BOLLOCKS!

 

Don't fall for the hype of ESG, those who promote it will be out of work soon enough!

In 2021, Saudi Aramco raised $28 billion by selling bonds. These bonds were marketed as ESG-compliant, even though Saudi Aramco is a major producer of fossil fuels.

How did this happen? 

Well, there is a loophole in the way that ESG funds are regulated. These funds are not required to exclude companies that produce fossil fuels, as long as those companies meet certain ESG criteria.

In the case of Saudi Aramco, the company was able to meet these criteria by creating a complex web of financial structures. 

Aramco created two special purpose vehicles (SPVs) to issue the bonds. These SPVs had no direct links to Aramco, so they were able to get an above-average score in a widely used ESG screening.

As a result, the bonds were included in JPMorgan's ESG indexes, which are tracked by about $40 billion of assets under management. This meant that ESG investors were unknowingly investing in Aramco.

These structures allowed Saudi Aramco to sell its bonds without actually having to change its business practices.

This loophole is a major problem for the ESG investing industry. It allows companies like Saudi Aramco to greenwash their image and attract investment from ESG funds.