The Unsettling Reality of ESG Investing
In September 2015, the US Environmental Protection Agency exposed Volkswagen for installing software in their diesel-powered cars, enabling them to deceive EPA emissions tests. Termed "Dieselgate," this scandal became the costliest in automotive history, exceeding USD 30 billion in fines and damages. The fallout raised doubts about the survival of the 80-year-old industry leader. This incident underscores the significance of environmental, social, and governance (ESG) investing. Globally, there has been a surge in ESG funds, particularly in the United States, where nearly one-third of total assets under management are in this segment, primarily led by pension funds.
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