Anyone who has been warning that ESG scores are coming and it will effect your ability to get a loan have been accused of being a “conspiracy theorist”. First, it was that ESG wasn’t happening at all. Then when story after story was released talking about how financial institutions are already implementing ESG and customers started seeing these ratings on their accounts we were told “Well, it’s happening but it’s not going to effect anything. It’s only so that you can be more informed”.
FICO, the leading company that calculates your credit score, is now openly admitting what the “conspiracy theorists” have been saying all along, and that is that this new system is coming and it will effect your ability to get a loan if your investments or where you spend your money isn’t environmentally friendly enough, the board of directors isn’t diverse enough, you eat too much meat, you drive a car that uses too much gas, you donate to Conservative organizations, etc. This ESG score would be based on the list of things that I just mentioned and have nothing to do with your ability to pay the loan back like a credit score is.
According to FICOs own website in an article titled “Lending Predictions for 2022“:
“The ESG (environmental, social, governance) agenda has grown rapidly in recent years and is forcing seismic shifts in some industries such as energy and transportation, as consumers, investors, employees and regulators raise their expectations of corporations. The recent COP26 Conference statement prescribed that in order to “power us towards net zero by the middle of the century every financial decision needs to take climate into account”. The COP went on to state in one of its four associated actions that “Banks, insurers, investors and other financial firms need to commit to ensuring their investments and lending is aligned with net zero.”
In financial institutions, much of the ESG agenda is delivered at the corporate level, but in 2022 we expect to see an increased focus on bringing ESG data into more granular lending and investment decisions. This will require increased innovation in the use of alternative data across all kinds of lending. One example would be the inclusion of property energy ratings data in mortgage valuation and decisioning, and CO2 emission data for small businesses.
As new data sources come on stream, such as IoT device data, there will be an increased focus on developing new data assets such as individual carbon profiles. Organizations will increasingly need flexible data and decisioning platforms that enable these new data sets to be ingested, assessed rapidly for their validity and then deployed into decision-making processes. Over the longer term, we expect that ESG and climate risk evaluations will become an integral element of credit risk and affordability assessments, and banks and financial institutions will increasingly seek to help consumers and businesses to improve their carbon footprint through provision of education, insights and incentives.“
If you do business with companies that are deemed harmful for the environment like companies that produce meat, invest in a oil company, have a car that isn’t “green” or if you don’t have solar panels on your house, your ESG score will suffer and it will soon effect your ability to get a loan.
At this point I don’t know what else to say to wake people up if they aren’t awake already. We are now seeing the implementation of ESG everywhere and yet there is still a large portion of the population that either has no clue what ESG is or are still claiming it’s just some “right wing conspiracy theory”. This is happening and they are moving quickly to implement this system which transforms us into a system similar to China’s.
If you want to know more about ESG, the Great Reset and what is already being implemented, visit Mikulawire.com and click on the tab at the top of the page titled The Great Reset. There you will find over 30 articles that I have written over the past 18 months and more are being added often as I come across important information.
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