We invest for return and with regard for risk and objectives. But what type of risk are we protecting ourselves against. I offer you 2 scenarios for consideration.
1- BP --- they were the subject of a huge lawsuit several years ago based on an accident that may or may not have been avoidable (it really depends on how you view it). As a shareholder of that company, you are exposed to the knock on consequences of their corporate decisions, and in this case project mis-management.
2- Facebook -- something a little more recent, and that is Facebooks exposure to regulatory reform. While not a major page turner, just last week the executive heads of the company refused to appear here in Ottawa to answer questions from some federal officials. Is this symptomatic of a bigger problem?
Now, you may feel that these companies are too big to fail, but in the long term......is anyone really? Here is an insightful look on ESG. I encourage you to click here