ESG isn't always G
The ESG index investor is an oxymoron. Index hugging leads to the tragedy of the commons in governance.
True governance comes from active owners. They need enough skin in the game to spend resources on aligning management.
Index funds and other asset collectors, only following ISS proxies, don't have skin in the game.
We managed to increase the offer price on a Norwegian company with, conceivably, poor governance. The increased offer, from the initial bidder, came only days after their first board recommended bid.
It is a case study on how misaligned management can become when active owners are not around. Please see my open letter to NattoPharma shareholders here: https://bit.ly/2NEGBr2