A LOT of our Environmental, Social, Governance (ESG) money goes to tech companies. Take the world’s 20 largest ESG funds – worth a combined $340 billion.... Microsoft, Alphabet, Apple, Meta or NDIVIA are all among the top holdings.
These tech giants are raking in billions of dollars ear-marked for sustainability. So… is it ok that they are spending it on the metaverse? How is this “ESG”? And is our money really being spent in the way we intended?
... Are well-meaning investors getting tricked?
Tech companies are OBSESSED with the metaverse
Over the past months big tech companies have been super keen to keep the metaverse conversation flowing. It’s obvious they want to create a LOT of hype about this new platform.
What’s more, they're are investing heavily in it. Microsoft just purchased Activisation Blizzard for an eye-watering $75 BILLION[1], bringing its metaverse spending to an insane $96 billion[2]… More than its entire 2021 income.
Meta went down the same route. Firstly, by changing its name. And secondly by spending a belly-busting $10 billion on metaverse investments in 2021[3], chucking any profits down the toilet.
All the big tech companies have been pumping sh**loads of money into developing the metaverse... and that includes the money they get from ESG funds.
As ESG companies, big tech have an obligation to the planet
These tech companies don’t just land on the ESG investment lists for no reason. They’ve made promises and commitments to help improve the environment or society. It's on that basis that they make it onto these investment funds and get billions upon billions of dollars.
For example, Microsoft has made a pledge to become carbon-negative by 2030. So, we handed over our money. If the brand is now pumping tens of billions into the metaverse, sustainable shareholders need assurance that the platform will help Microsoft achieve it's goal.
Sadly, it doesn't look like the metaverse will be good for carbon emissions at all...
How will the metaverse impact the climate crisis?
You could argue that people will take less planes and transport, choosing instead to opt for metaverse meetings. It’s a nice theory. But would that really happen? I recently took a visit to Decentraland and the graphics were shocking. Like, SHOCKING.
I’m self-isolating right now, I have nowhere to go. But I still couldn’t wait to leave. The graphics need work.
What’s far more likely, is that energy usage will sky-rocket, while transport numbers will lessen a tiny bit or stay the same. Environmental analysts are worried. For the metaverse to work, Intel revealed that a 1000-fold increase in energy is needed[4]. One thousand. Times. More. Energy. Needed.
You guys, we’re supposed to be reducing our footprint. Big tech has made giant commitments about becoming carbon-neutral by 2030. They’re promising one thing. And then doing the opposite.
Today, high-end gamers pump 2,000 pounds or 907 kg of carbon emissions into the atmosphere each year[5]. That’s the equivalent of driving a car for 2,250 miles[6]. For the metaverse graphics to become as realistic and addictive as gaming (and let’s be honest, they really need to improve)… this is going to be the environmental cost. Tonnes and tonnes of additional carbon emissions. Our planet cannot handle that. It can’t even handle the level we already have.
Honestly, I feel like smacking my head against a rock. Why isn’t this getting through? We don’t have time for carbon-intensive metaverses or space travel. Obviously. We really need to be working on ways to save the planet we already have. It’s like when you have to work on a school project, with another kid who just messes around, gets distracted and keeps trying to do random other things. Except instead of a school project, it’s our planet. And instead of getting a bad grade, we’re all going to die. Bloody hell.
Will the metaverse affect our health?
15% of people aged between 23 and 28 in the US already suffer a social media addiction. And, for younger age groups, that figure rises to 40%[7]. Using social media has been linked to insomnia, anxiety, low self-esteem and depression. 😳
And disturbingly, increased social media engagement also correlates with a rise in suicide-rates for 10-34 year olds... Especially for girls[8]. Something is clearly going wrong. And it’s hitting the youngest and most vulnerable people in our society the hardest. The very generation that we – and especially ESG companies – are supposed to protect from harm.
Cyber-bullying has seen an unprecedented rise over the past decade too. It’s a weird thing. Somehow, it’s much more insidious that in-person bullying. I remember once someone from my school left a comment about me on a Facebook picture. She wrote “omg get a nose job!”. And even though I wasn’t self-conscious about my nose, it still kind of lingered in my self-esteem.
It must be really excruciating to be a teenager and get bullied online. You must feel so powerless. Because how can you ever really stand up to them? How can you escape them? How do you even know who they are? Somehow, I don’t think that the metaverse is going to make this problem better. It just opens a whole new portal for bullies, predators, and vulnerable people to meet.
I could go on. With more depressing statistics and mental health concerns... But do I really need to? We all just intrinsically know that too much time away from real life is bad. This is why so many of us are overweight, pale and need glasses.
We intuitively figure that spending even more time gaming or on Twitter is probably not the best idea. Has anyone ever laid on their death bed and said, “I regret that I didn’t spend longer on Facebook”? I really don’t think the metaverse is going to be good for our physical or mental health. And I don't think many people would argue with that, because it's f**king obvious.
Will the metaverse be good for society?
Uuuuuuhhhh… strong no?
We have housing crisis. In the UK, 227,000 people don’t have a bed to sleep in[9]. Across the world there are more than 150 million people who don’t have a home[10]. 150 million.
What are we doing, investing so much time and money in a virtual land!?
How insanely far-removed from real life are the billionaire CEOs behind these ideas? I don’t want to live in Zuckerberg’s weird fantasy. I want to be a normal person, who pays my fair taxes (unlike tech companies) and lives in the real world.
We're not getting what we paid for
ESG investors have become shareholders in the metaverse 😖, the fund selections have made it more or less inevitable. Especially if you have a ready-made stocks and shares ethical ISA or investment portfolio.
We have a very real climate crisis. Right here. Right now. It's not at the door. It's walked through the door, down the hall, up the stairs and has hopped into bed with us. We're seconds away from getting royally and irreversibly f**ked.
As sustainable investors, we MUST hold companies to account when they shirk on their climate commitments. These tech companies have taken our ESG money. Where's the action?
To hell with the metaverse, I want to fix our real planet.
Sources:
[1] Source: Business Insider
[2] Source: LiveWire
[3] Source: The New York Times
[4] Source: Intel
[5] Source: MIC
[6] Source: MIC
[7] Source: Statistica
[8] Source: NewsWise
[9] Source: Big Issue
[10] Source: MAHB
And of course, my anonymous investment manager source... who still doesn't have a code name 😎