90 Miles From Tyranny : The ‘ESG’ Scam Rates Slave-Using Chinese Firms Higher Than Clean American Energy Producers

Tuesday, June 28, 2022

The ‘ESG’ Scam Rates Slave-Using Chinese Firms Higher Than Clean American Energy Producers


A firm in China that uses slave labor has a better ESG score than an American firm that pays landowners who freely sell their mineral rights.

Expecting publicly traded companies to do more than simply return shareholder value — their fiduciary responsibility — is a fairly new development in Western capitalism. The idea that corporate leadership and shareholders should explicitly care about environmental, social, and corporate governance (known as ESG) issues beyond how they might affect the bottom line has been around for only about 30 years.

But now, ESG investing has become a big driver in steering capital to corporations deemed to be good stewards of subjective principles. By 2025, financial management firms that claim to invest with ESG principles are projected to account for $50 trillion of a total global value of $140.5 trillion — more than a third of managed investments.


But is ESG investing trustworthy? Does it really do what it claims to do?

MSCI is one of the world’s largest investment support services firms, with $2.1 billion in revenue. It offers an ESG rating service. I noticed that my Charles Schwab account recently started to display MSCI’s ESG ratings alongside that of the more traditional ratings services — services focused on a company’s profitability.
Comparing U.S. and Chinese Companies’ Ratings

Curious, I looked into the rating of a firm I own some stock in: Texas-based Brigham Minerals (NYSE: MNRL). Brigham looks for land that could produce oil and gas, and owns mineral and royalty interests in 7,909 oil wells and 688 natural gas wells in West Texas, New Mexico, Oklahoma, Colorado, Wyoming, and North Dakota. MSCI rates Brigham Minerals as a B, the sixth lowest of seven ratings that range from AAA to CCC, labeling it a “laggard” in the industry with an overall score of 2 out of 10.

I previously wrote about ESG investing’s blind spot for China three years ago in Fox Business, pointing out that investment firms playing in the ESG space were also bullish on China — a nation with terrible air and water pollution (the “E”), horrendous human rights abuses (the “S”), rampant corruption, opaque accounting standards, and rule of law only at the forbearance of the Chinese Communist Party (the “G”).

Not expecting the financial industry to have changed for the better, I looked up three China-based energy companies and compared them to Brigham Minerals. They were Xinyi Solar Holdings (OTC: XISHY), China Resources Gas Group (OTC: CGASY), and China Coal Energy Company (OTC: CCOZF). All three beat the American energy company in their overall rating.
Buying Into CCP-controlled Enterprises

Now, it’s important for investors to understand that you really can’t own shares in a Chinese corporation. When you buy shares in a corporation based in China, you’re really buying American Depositary Receipts (ADRs) that represent shares issued by companies in the People’s Republic of China. As such, your ownership rights are more theoretical than real and are subject to the whims of the Chinese Communist Party.

Further, many Chinese firms that have ADRs traded in the United States are themselves subsidiaries of state-owned enterprises — meaning that if you buy these ADRs, you are directly investing in an entity fully controlled by the Chinese Communist...




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2 comments:

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Rick said...

I followed the link for MSCI.
I'll say it this way; one year, the insurance underwriter for my business required I provide a mission statement.
I thought their demand to be absurd. (Yes, demand. Else they would cancel my policy)

So it was an utterly BS statement that I
presented them. I was certain to include the buzzwords popular in government/business circles at that time. I guess they were satisfied for I received nothing further and my policy wasn't cancelled.

In reviewing the bullshit on the MSCI link, knowing (I had been married to a corporate/government career HR type) that's the kind of shit they shovel and swallow in that rarified elitist environment, I am at once fillled with complete disdain and frantic joy. I cannot overstate my despisement of them yet it is with rapturous joy that I contemplate their imminent undoing of biblical proportion.

That they boast over 2 billion in revenues tells that there are many of no understanding, lacking wisdom, devoid of character. No surprise there.