The Standard & Poor’s 500 ESG index is designed to measure ecological, social and governance services (hence the acronym ESG) companies with large market capitalization, because the global transition requires a more sustainable economy, so much so that the vocation of an organization to ESG is increasingly linked to risk and return management.
In April of each year, the index reconsiders the methodology with which it evaluates the companies to be included, and Meta again does not appear in the list, made up of 308 companies.
Statistics
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by Emanuele Capone
05 Maggio 2022
Purgatory
The reasons why Meta was excluded are evasive, the index declares that it is a “suitable but not selected” company. It is therefore necessary to understand what can be hidden behind such a cryptic statement. Since the S&P 500 ESG index is recent (dates back to 2019), as is the sensitivity of investors towards companies that pursue sustainability policies, Standard & Poor’s reserves the right to take into account evaluations taken in a period prior to the index itself. . And this brings us back to 2019, the year in which Meta (at the time Facebook) was not included due to its smoky data release policy to advertisers who, among other things, includes Russiagate (exploded in 2017 and relating to the 2016 US elections) e the Cambridge Analytica scandal (which exploded in 2018 and relating to the previous 4 years).
In 2020 Facebook entered the S&P 500 ESG index since they have been the efforts he has made rewarded (considered better than those of many other companies included in the list) to align with the parameters of the time. Considering that the Council of Institutional Investors, a US association that manages funds for approximately 4 trillion dollars, he did not share and that led to the drafting of a letter addressed to the upper echelons of S&P Dow Jones Indices LLC, a multinational that also manages the S&P 500 ESG index. The communication made clear the need for Mark Zuckerberg’s company to be excluded again, citing, among many reasons, also the doubt that the CEO was unable to face the pitfalls of the market without making use of capable consultants. In other words, even before consider the ecological and social potential of Facebookthe Council of Institutional Investors questioned Zuckerberg’s managerial skills.
In April 2021, Facebook (which would become a Meta in October) it no longer appeared in the index, as it happened in the most recent update of 2022, this time however acknowledging that it was not included even if it was a candidate. As if to say that, although there were the prerequisites to be part of it, it was preferred to leave her on the bench. A an attitude that Bloomberg helps to explain with shareholder concerns asking for reassurance about i potential damage the metaverse can do.
Ecology
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by Antonio Dini
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Other Big Techs resisted yet another update of the S&P 500 ESG index parameters. These include Alphabet, Amazon, Apple and Microsoft. Situation similar to that of Meta for Elon Musk, given that Tesla also dropped off the indexwhich instead includes the oil giant Exxon Mobil.