Larry Baum

2 karmaJoined Feb 2023


Thank you for this broad introduction to ESG in relation to EA. For people like me who know little about ESG, this is very informative.

One thing that strikes me is the comparison between EA charity evaluation and ESG rating. While charity evaluators focus on a very few charities who can provide comprehensive, quantitative data, I assume that ESG rating agencies attempt to rate every large company. While EA charity evaluators convert results to one metric (such as DALYs/$) to have a common currency to compare organizations, the impression I get is that ESG rating agencies aggregate many dimensions like teachers grade students: by combining some hybrid of absolute scales and relative scales (grading on the curve) into letter grades, which can then be averaged.  While the measures that EA charity evaluators use, such as saving the most lives for the least money, are probably goals that most people would consider good and reasonable, ESG rating agencies have to lump together a wide variety of goals, each of which is valued across a wide spectrum by people in the world. Some of the goals may even be regarded negatively by substantial fractions of people, while high priorities of many people may be omitted from ESG goals.

So ESG rating seems far more ambitious and challenging than EA charity evaluation. But it may still be worth trying, because the impact might be very large.

It seems very difficult but perhaps valuable to try to overcome the problem of combining disparate dimensions by not resorting to qualitative letter grades, but instead by estimating quantitative effects using a single measure, like DALYs. Easier said than done, though.

Whoever lacks a dollar knows best how to use the next one.