The value exchange between ESG Analysts and Corporates is broken.

Lots of debate right now about the validity and value of ESG in company analysis. As societies we are great at solving problems. Then we over engineer them again and again until their initial purpose is forgotten and so was the exchange of value. 联合利华 invented lifebuoy soap a long time ago to help keep us clean. The average supermarket now has at least 1000 products to keep us clean!

We have a value exchange out of kilter. It's between ESG Analysts and Corporates.

Before the exchange of value WAS quite simple.....

Corporates provide ESG Data firms with data on performance. The ESG Data firms then rated and ranked the business.

This THEN ended up in the hands of investors who bought more shares or debt in higher rated companies.

Voila - a simple exchange of value. You give me your data. We get you investment to do more.

But that is not where we are now.....The market is failing.

I'm hearing pushback from corporates on the ever longer queue of ESG specialists and analysts demanding data from them.

• Refusals to provide the data. The argument simply being the questions ESG analysts are asking are not core to business and therefore take lots of time to answer and are in fact peripheral.
• Companies getting more comfortable telling their own story with their own data to their own investors. They thrive or die on their own disclosure sword.
• Corporates demanding proof from ESG analysts that by giving THEM their data it will result in more capital to run the business. Very few can prove that.

I can help feeling that recent push back from US Politicians on ESG houses is fuelled by them spotting the market failure that is happening around us.

So whats the answer? Corporates telling their own story transparently.