Dai, Tinglong, and Christopher S. Tang. "ESG Investing Has a Sustainability Blind Spot: Supply Chains". Fast Company. November 23, 2021. https://www.fastcompany.com/...

ESG agencies don't consider the global supply chains that support company operations when measuring and rating their ESG performance.  Where ESG rating agencies ignore supply chains, the companies cherry-pick the metrics that boost their environmental and social sustainability ratings and ESG reporting.  Biased performance metrics selection occurs because there is no unified or generally accepted reporting standard on end-to-end supply chains, allowing companies to conceal “bad” suppliers.  Without accounting for a company’s entire supply chain, the ESG ratings fail to reflect global supply chain networks.  This leads companies to choose favorable ESG performance metrics and thus “greenwash” their supply chains. .

Posted on 08/07/22

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