“Limits to Private Climate Change Mitigation” is an interesting working paper by the IMF on the link between ESG scores and carbon footprint.
In principle, greater attention from climate-conscious investors, shareholders, regulators and the general public on ESG considerations should normally encourage firms to improve their ESG scores and, in the process, bring down emissions.
Discouragingly, results from this paper suggest that high ESG scores are not necessarily correlated with companies’ actual carbon footprints.
Therefore, from a climate change policy making standpoint, managing GHG’s footprint cannot be achieved solely by over-relying on ESG indicators.
Published by Dr. Wael Mohamed Aaminou
Witnessing the 2008 financial crisis unfold in the United States was a defining moment in my career. This experience led me to transition towards ethical finance, which prioritizes the real economy, social welfare, and environmental sustainability.
This journey has since taken me across Africa, the Middle East, and Southeast Asia, where I have contributed to shaping financial ecosystems across various sectors, including energy, agriculture, healthcare, and water. These diverse experiences have taught me that development challenges are complex and require a holistic approach, especially when resources are constrained. I have also learned that prioritizing key issues, particularly climate change, is essential. Climate change impacts nearly every sustainability perspective, making it a focal point of my work.
In my current work, I leverage my expertise to confront climate challenges and drive the growth of green and inclusive economies, particularly within emerging markets.
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