Scores issued to companies on their environmental, social, and governance credentials “oversimplify complicated facts” and are like a “scarlet letter,” SEC Commissioner Hester Peirce said.
“We pin scarlet letters on allegedly offending corporations,” Peirce, a Republican member of the Securities and Exchange Commission, said in a June 18 speech at the American Enterprise Institute, referring to a novel.
In “The Scarlett Letter,” a woman is forced to wear a scarlet letter ‘A’ for committing adultery.
Peirce said it’s difficult to decide what issues should be included in ESG scores and how to measure success or failure. The shortcomings of ESG...