Eli5: what are ESG scores, and how do they work?


I recently heard about esg scores and that americans use this system to basically gague how progressive a given business or organisation is. Is this a actual number? How are the weights determined? Say one business makes an effort to be more environmentally friendly but has a skewed gender ratio in their employees. This vs another company who is not environmentally friendly but has equal gender parity though say quotas. Who is higher on the ESG? Who determines the score? Who collects them? What are they used for? Are there benefits and conversely disadvantages of having a high/low score?

This is very confusing to me as a european.

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It’s essentially the merger of state interests and industry. Corporatism basically. The economic model of all fascist countries. My view of it is that it’s basically a Chinese style social credit system for corporations.