Gustavo Bernal Torres
Why Do ESG Funds Own Shares Of Facebook?
Facebook’s platforms have been engineered to make users angrier and angrier to keep them engaged. These are just a few of the conclusions of a recent series of investigative reports by the Wall Street Journal.
These reports beg a pretty big question for ESG funds: Why is Facebook among your top holdings? Take the iShares ESG Aware exchange-traded fund (ESGU), which has more than $22 billion in assets under management. It counts Facebook in its top five holdings—as does the Vanguard ESG U.S. Stock fund (ESGV), with more than $5 billion in assets.
If the Wall Street Journal reports on Facebook are true (their reporting is amply backed by internal Facebook documents), ESG funds may need to take a timeout. Not only would socially conscious investors’ money be supporting a socially irresponsible company, but they’d be paying premium annual fees for the privilege.