ESG Research of the Year, North America: Util

Util Inaugural Report ‘How is the SDG ESG?’ won ESG Research of the Year, North America, for its examination of the entire US fund market based on social and environmental impact.

In its report, Util observed that ESG funds do not have a significant additional positive impact compared to non-ESG funds, as ESG funds rely on ratings that set the bar for corporate citizenship “abysmal low”, despite charging a premium.

Util has found that most sustainable funds, and the data behind them, focus on relative performance based on self-reported data, rather than the absolute impact of business activities on social or environmental goals.

Util found a marginal difference of 2 percentage points on a scale of -100 to +100, as shown in Environmental financing.

In the report, Util recommended next steps for asset managers, including a greater focus on the total value chain of any sustainability theme and how machine learning can be used to untangle these patterns.

Patrick Wood Uribe, CEO of Util, said: “The report draws attention to the distinction between impact and ESG.”

Commenting on the future of ESG, Uribe said: “I think the key is to be very data driven and to be comfortable with the fact that it’s a complicated picture. We manage complex decision-making all the time as humans, so there’s very little reason not to do it in this case. Also, that’s where the opportunities are. So, there there are many advantages to recognizing this complexity.

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