Xeshra: To those investors, what is truly important is to get the lowest risk possible with the biggest "returns"; not to complicated to understand. They kinda was setting up a certain strategy, those rules... in order to "increase" the likelihood of the "good fortune" they are looking for, nothing else. The rules are basically the ones which are politically in the highest "correctness" no matter be it social, on the environment or what else it is focusing on.
That is the main marketing statement of ESG, as put forward by Blackrock, yes. You can either buy it and move on, or look at the real life situation in the past couple of years at least, and whether it actually corresponds to those claims and start asking questions.
Because that claim is true in the Blackrock - companies relationship (Blackrock can simply enforce it, as evidenced by pretty much everyone adopting it because again - "fuck you" amounts of cash), but absolutely not true in the companies-customers relationship (where they just do not have that much direct power over the customer). Especially once these "rules" start seeping into the end products, most egregiously from the "S" pillar of the ESG. It is very obvious when that starts happening in the entertainment industry and it eventually started boiling into the widespread dislike of the entire concept. This creates a paradoxical situation, where companies are rewarded from above, but punished from below. And they usually come to a point, where a decision is made. Between the surety of investment money, which will guaranteeably cover a big chunk of any expenditures beforehand if they just follow a set of "simple" rules, say the right words and do the right things, vs risking trying to satisfy the needs of their actual end customers and hoping it is enough to make profit afterwards. And as you said, it's about minimizing risk right? :)
So many, if not most do take the first option. And any company going all in on ESG becomes de facto dependent on funding from above and no longer puts the customers' needs and wants as their top priority. This funding model will keep them going for a certain amount of time, the length of which depends on many factors which would take too long to cover, but it's beneficial to the company in the vast majority of cases - in the short to mid-term. But losing a large part or even the vast majority of their customer base over it will eventually catch up to them. They can live off of investment money without turning a profit for only so long. And when that moment comes, they will have become so dependent on this funding model, that they will most likely crumble anyway if they try to change ways. Look no further than Ubisoft for a very recent example. It took a long time, they've been bleeding money for years and years, but it did eventually catch up to them.
The entertainment industry especially is very fickle in this regard. A washing machine maker can only really do so much to "ESG-ify" the end product. They will probably adopt some principles at the company level, like hiring practices and such but little of it will show up in the end product - the washing machine. But it is clearly on display in everything the entertainment industry churns out, be it a game, show or a movie. Which is why often, the ESG is actually a trap in this industry. A very alluring one, but still a trap.
Xeshra: Albeit... recently it seems like the entire "forcing rules for even better success" was going overboard for many companies involved and it looks like the entire matter is now with some side effects actually no benefit to the "original intention" anymore. I guess this entire matter may need to become reformed in some way but i dunno how fast those changes may happen.
Quite. The fact they're forcing it, doubling down even, instead of adjusting the rules to actually fit the real end customer market more is a quite clear sign, that at least one puzzle piece simply does not fit in with any of the others. At least not anymore.