Impak Analytics is proud to present an impact analysis of the three largest tech companies in the world in 2022.
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Doubts on ESG ratings' trustworthiness
Among the Big Tech companies, Apple, Microsoft and Alphabet have some of the best ESG (Environmental, Social and Governance) scores on the planet. According to Yahoo Finance, they hold 7th, 3rd and 1st place, respectively, among the Top 12 ESG companies of 2022.
However, their impact analysis on ESG factors shows an unexpected conclusion. After analyzing Apple, Alphabet and Microsoft with an impact approach, each has an impak Score™ lower than 200 points out of 1,000, making them average rather than leaders. To put things in perspective, the average impak Score™ of impak's large-cap universe is 145 out of 1,000 points, with best-in-class scores above 400.
The impact approach to answer investors' needs
"Assessing the global impact of a company requires a holistic analysis [...], and the traditional financial metrics alone provide neither a complete nor a comprehensive picture of a company's impact. A narrow focus may be detrimental to achieving the United Nations's 17 Sustainable Development Goals or investor returns in the long run."
The study intends to demonstrate (i) why the ESG approach appears to have yet to adequately assess the global impact of the three companies, (ii) the extent to which the consideration of Apple, Alphabet & Microsoft's numerous and severe controversies is crucial to the understanding of the sustainability-oriented investor, and (iii) why their mitigation of negative impacts does not equate to a positive impact.
The tipping point of sustainable finance
Going beyond the financial materiality of ESG assessment, the analysis shows that Apple, Alphabet and Microsoft fail to be the real proponents of sustainability.
We are at a pivotal moment for non-financial reporting and as shown in the study, the market has all the tools, theories and data to prevent further misleading ESG ratings on large-cap companies.
A must-read for any investor wishing to avoid reputational risks and to make a measurable impact on both people and the planet.
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