To: Standard & Poor’s, BlackRock, McKinsey, Accenture and other potential partners
From: ESG Boutique
Topic: New Solutions
ESG’s fixture is ready. Regulators swarmed. Investor enthusiasm is waning. Executives were disgusted. It’s a life-or-death threat to the army of asset managers, data providers, advisors and advisors that has mushroomed over the past decade.
Here’s our solution: turn to crap.
The BS Index™ outlined here represents a sustainable source of income as we finally turn this infinite resource into a tradable asset class.
An exchange last week revealed the urgent need for Pivot, and the first candidate to be included.
In his provocative speech, “Why Investors Don’t Have to Worry About Climate Risk,” Stuart Kirk of HSBC Joking that he’s not your typical responsible investment leader because he “never used the word ‘journey'”.
He was suspended by the bank and got a ridiculous rebuke from his boss: ‘Transition to net zero is the most important thing [sic] It’s important to us and we will work hard to find ways to help our clients on this journey. “
HSBC’s response to concerns about the ESG complex was seen by many as more offensive than Kirk’s words. This debate exposed the real divide between those who accept BS and those who don’t.
We can take advantage of this. Some investors will choose to short the index, arguing that BS is being used to mask a lack of true thinking. Others will stick with it, arguing that BS is all about the hype, which works great in a bull market.
Identifying BS is subjective, but can be inferred with the help of several analytical frameworks, all of which can be used to charge companies and investors more. Just like ESG.
Measuring the company’s reliance on profit adjustments will be a key metric. Not all adjusted earnings are BS – but many are.
Sentiment analysis of earnings calls that are fed into executives’ words through natural language processing software will be critical. For example, in a single response to ESG questions last year, HSBC’s CFO referred to the “next industrial revolution,” saying “we want to be front and center for our customer base” and “we see it as a mission-critical “.
So of course HSBC joined in. Who else?
Among the other top 100 companies in the world by market capitalization, Warren Buffett-led Berkshire Hathaway and Jamie Dimon’s JPMorgan Chase are unlikely to qualify: too blunt and clear strategies.
BP will definitely not do indices. Chief executive Bernard Rooney has boasted that the oil company is a “cash machine” and that it will not reduce UK investment if a windfall tax is imposed. That deadly honesty helped bring in taxes this week. BP investors would welcome more BS.
The CEOs of Apple, Amazon, and Alphabet are more prosaic than their unconventional, sleazy founders. But bland doesn’t necessarily mean crap: Analyzing their eligibility for index membership will take some time (and money).
Tesla also needs a lot of debate. Elon Musk, who last week blasted ESG as a “hoax”, has built a Volkswagen automaker from scratch. But he also named his non-self-driving car software “Autopilot” and went on to pretend he was bidding on Twitter.
Salesforce, led by thirsty founder Marc Benioff, has emerged as a leading contender for inclusivity with his vanity Time magazine purchases, prominent presence in Davos, and “Ohana” schtick .
Accenture will produce the index. “One of my big ambitions is to bring creativity to the board with the same status and influence as technology and intelligence, because creativity is a powerful amplifier,” an executive told a recent investor conference. , it is what is possible, what is possible, what should be the code. Yes.”
I am sure that Accenture and the rest of you, as potential partners in this program, will appreciate the possibilities of the BS Index. Please accompany us on this exciting journey.