Megaphone icon ETF Database is now VettaFi. Read More >
ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Future ETFs
    • Gold & Silver Investing
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Modern Alpha
    • Multi-Asset
    • Portfolio Strategies
    • Retirement Income
    • Thematic Investing
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Videos & Podcasts
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. ESG Channel
  2. Twitter Spaces: Is ESG Screaming Into the Void?
ESG Channel
Share

Twitter Spaces: Is ESG Screaming Into the Void?

Aaron NeuwirthJul 11, 2022
2022-07-11

Starting now! Join @DaveNadig, @EricBalchunas and @NateGeraci as they debate all things #ESGhttps://t.co/h5A2EtRWEm

— VettaFi (@Vetta_Fi) July 11, 2022

Despite its growth in recent years, the nature of ESG (environmental, social, or governance) has remained polarizing. In two recent VettaFi articles, the subject of ESG was explored as far as what it really means and if any proof of its success could even be measured. For a recent Twitter Spaces conversation, VettaFi’s financial Futurist, Dave Nadig, was joined by Senior ETF Analyst at Bloomberg, Eric Balchunas, and President at ETF Store and host of the ETF Prime Podcast, Nate Geraci, to further discuss the value of ESG.

Right off the bat, it is safe to say that regardless of the opinions regarding what ESG could or has accomplished, the acronym in and of itself is terrible. As noted by Balchunas, it’s become tiring based on presence alone, as the label has such a broad reach, leading to wildly divergent firms having equal claims to ESG. It’s gone so far that anti-ESG ETFs now exist, as if there’s a need to go to that distance to take a stand against either the concept or, within context, against how it’s become generalized.

To be clear, it’s not as though there isn’t a place for what ESG can ultimately accomplish were one to involve it with proper funds based on what the concept should ideally be used for. There’s certainly a positive mentality out there as far as how companies and funds can evolve for the better with the right kind of push.

"Of course I want a better world – I just don't believe that can be accomplished by someone's investments, it can be accomplished by actual ACTION." – @NateGeraci on the impact of #ESG funds on the world

Tune in now: https://t.co/h5A2EtRWEm

— VettaFi (@Vetta_Fi) July 11, 2022


Content continues below advertisement

This speaks to the thought that overhype has had its effect on the potential of ESG (particularly when looking at its delayed boom), as well as on those who were not speaking against the concept of having an awareness of the important standards it addresses, but on the way, it’s being utilized as a go-to add-on for many firms that don’t really represent ESG properly.

Can ESG Work?

For various reasons, including how politicized ESG has become in some circles, it’s been difficult to properly define and measure the success of the ESG factor within ESG ETFs. However, it’s not impossible. As Nadig points out, while it’s easy to look at anecdotal investments into ESG-related funds and not see that doing much to move the needle, there are instances where these various small investments have been collected to make up much larger amounts, which can have an impact.

As Nadig states, even putting aside some of the impact seen from an investor’s perspective, one can still consider the heavy increase of activism in corporate boardrooms. Similarly, looking at the cost-per-capita when it comes to the rates firms are climbing based on an embrace of ESG is also worth noting, but having the exact means to truly measure this area is where things become tricky.

Balchunas and Geraci continue to offer varying points on interpreting the validity of ESG’s accomplishments. As it stands, many ESG methodologies can create short term opportunities for outperformance. This could allow ESG investors the opportunity to outperform from a combination of risk management and the impact of continued ESG flows. In the long term, however, Nadig believes ESG investors should expect the cost of capital impacts to be a potential offsetting drag on performance.

There’s perhaps not a proper answer to how well ESG works, but it’s certainly a topic worth discussing. It’s early enough to know ESG concerns are worth exploring, and this conversation between Nadig, Balchunas, and Geraci has plenty of interesting observations.

#BreakingNews @EricBalchunas and @NateGeraci actually agree with @DaveNadig on two things. 1) #ESG lacks definition and 2) ESG is in the eye of the beholder.

Thanks for joining us! If you missed it, make sure to listen to the recording: https://t.co/5QKOMfjlYg

— VettaFi (@Vetta_Fi) July 11, 2022

For more news, information, and strategy, visit VettaFi.com.

Loading Articles...
Help & Info
  • Contact Us
  • Mission Statement
  • Press
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © ETF Flows LLC
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X