ESG investing - grappling with the challenge to quantify the qualitative?

As the importance of ESG to investors and the broader business community grows, so the question of how we appropriately capture a business' ESG-ness becomes increasingly important too.

We all understand that it is not enough for a business merely to say "we are ethical". But, is there a usable metric out there for us to apply to businesses to help us know where they stand on this vital issue?

According to the FT at least, there are a great number of measures, but they work differently and generate different answers to the same questions. For example, Tesla shows as very highly rated for ESG on some and does not do so well on others.

Where does this leave things? I think there are three takeaways that jump out to me:

(1) ESG is a very "broad church". So, when looking to assess whether a business "is ESG" or not, we should probably be thinking about focusing the discussion to in what ways is a business positively ESG and where does it fall short? This will help the businesses to know where to focus their efforts going forward and will help investors know more meaningfully about the type of business in which they are investing;

(2) "greenwashing" is likely to continue and grow as the importance of ESG (the monolithic concept) continues. It's easier to hide when the seeker is looking at the forest as a whole rather than each tree; and

(3) if we don't bring this level of granularity and perspective to this debate, it is more likely than not that the "Authorities" will introduce complex, detailed and difficult rules to regulate this sector. We'll be left with "ESG  by numbers" where greenwashing may be more difficult, but businesses will need an army of consultants and advisers to help them navigate the regulatory minefield, because it won't be enough for a business to espouse an ESG culture, it will have to be able to demonstrate that in line with rigid requirements. And experience tells us that regulation and nuance do not sit comfortably together.