High stock valuations give ESG funds ‘bubble’ worries
Companies with responsible environmental, social and governance practices lured a record $85bn in the US and Europe in 2020, and are still raking it in
26 January 2021 - 19:03
London — Exchange-traded funds (ETFs) investing in companies with responsible environmental, social and governance (ESG) practices lured a record $85bn in the US and Europe in 2020, and are still raking it in.
Pumped up by the flows, stocks in many of these funds are trading at frothy price-to-earnings multiples that are increasingly hard to justify. Take US fuel-cell maker Plug Power, for instance; the unprofitable company’s more than 2,000% rally since early 2020 outpaces even Tesla’s...
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