For a while now, I've actually been trying to develop a competing portfolio analysis framework to ESG investing. The problem is that it's just too time consuming and highly costly for me to do by myself. It's not really feasible.
What is something I can do though is an "Anti-ESG" Fund, which would essentially be a Total Equity Portfolio that inversely weighted a Total Equity ESG Fund. Think of it like putting more money into companies that got low (or no) ESG ratings and less money into companies that got high ESG ratings. If ESG investing was trying to promote companies that had high ESG Ratings the Anti-ESG fund would be trying to promote companies that got low ESG Ratings.
The flaw of this is that some ESG metrics are in fact a good thing, not all of ESG is bad. This sort of overlap between bad and good in the ESG framework was by design to make ESG easier to sell and stomach to people.
The feedback I've got so far is that a company like Strive Investing is already doing this; however, that's not true. Strive is simply looking to base their investment decisions on analysis not influenced by ESG. I am looking specifically to counter ESG. The reason why a direct counter to ESG is important is because the way in which ESG is being forced on companies right now is by altering the demand of equities. Companies need to increase the demand for their equities so the price goes up. Since people are opting to invest in ESG funds, the demand for companies that follow ESG goes up. If people started investing in an Anti-ESG fund, then this directly counters the pressures for companies to follow ESG. In theory, if Anti-ESG became popular, it would encourage companies to do the very opposite of ESG.
The end-goal would be to create a true ParSoc Valuation Framework with our own set of values/beliefs but I'd only be able to pursue something like this after gaining sufficient resources from the success of an Anti-ESG fund for example.
If you're curious about performance. Over the last 4 years, you'd have virtually identical performance; however, the performance over the last 2 years of the Anti-ESG fund has been better than the performance of normal ESG funds. Covid-19 and Ukraine war seems to have really put a damper on ESG Investing.
If I created such a fund and all you needed to do was ask your financial advisor to allocate some money to it, would you?
