A few weeks ago, I hosted some teenagers from an East London school on a (virtual) visit to learn about the investment business. In search of common ground, we focused on environmental, social and governance (ESG) questions and had an interesting exchange on climate change, sweat shops and overpaid bosses.

We also discussed the difficulty of deciding how a company stacks up on its ESG credentials. To help us along, I asked them to look through a sustainability lens at the websites of Tesla, Boohoo and BP and to review the recent news flow. Their conclusions were not what I predicted.

Needless to say, all three companies have had ESG challenges along the way so it seemed a fair question to ask the students which they would score most highly from a sustainability point of view on their day as a pretend investment analyst. To cut a long story short, they all singled out BP.

I had expected Tesla's electric vehicle story to put it on top, especially as the visit pre-dated the company's recent bitcoin embarrassment. But while they were all over Boohoo's employment record, what really caught their attention was the oil major's description of its clean energy ambitions. All credit to BP's comms, but it was not what I expected.

It's good to get out of the investment bubble where ESG is an article of faith and into the real world where these issues are just one among many. That's true whether you are still at school or the boss of a quoted company, as a recent sustainability-focused survey of our actual investment analysts confirmed.

What is abundantly clear from this global snapshot of 150 researchers, and the thousands of companies they follow, is that ESG as an investment approach is new, fragmented, complicated and inconsistent.

There are huge variations in how companies view sustainability and in how investors are attempting to measure it. The absence of common standards is glaring.

Focusing in on climate, some of the findings are unsurprising. Some sectors are well on the way to a new and cleaner world. Utilities represent an obvious green investment opportunity as the proportion of renewables rises. The energy sector, on the other hand, is more notable for its risks as fossil fuels are phased out and companies are left owning worthless stranded assets. Industrials sit in the middle, with clear opportunities to benefit from the climate transition but major risks too in the form of tighter regulation, disrupted supply chains and old-world legacy businesses.

What is also evident is a yawning gap between the parts of the world where the environmental challenge is well understood and factored into long-term business plans and the places where it is not. More than 70pc of analysts in Europe think companies have the right plans in place to decarbonise by 2050. In Latin America, Eastern Europe, the Middle East and Africa that proportion falls to a big round zero. American and Chinese companies are notable laggards on this front too, although the latter are starting to catch up fast since President Xi's adoption last year of a 2060 net zero target.

A couple of significant problems emerge from the survey. The first is that companies have been slow to link executive pay to real achievement on reducing emissions. Only a third of companies do this and only half expect their boards to demonstrate a focus on ESG more generally. Without financial incentives, sufficient progress is unlikely.

Secondly, while companies are increasingly keen to talk about ESG and sustainability, there remains a woeful lack of the internationally agreed standards that would enable investors and consumers alike to scrutinise their claims. Interestingly, in some countries like Japan, there are as many companies understating their progress in this area as over-inflating their achievements. The problem is bigger and more nuanced than greenwashing.

There's no shortage of regional standards being developed but none has yet gained any traction on a global scale. Until Europe, Asia and the US talk the same language about ESG, employ the same taxonomies and implement the same criteria to decide what is and what is not sustainable, we'll all be flailing around trying to make sense of different reporting frameworks, or worse, no reports at all.

One further problem is the clumping together of environmental, social and governance factors under one sustainability umbrella. It is too easy for companies to trumpet progress in one area while quietly glossing over their lack of interest in one or both of the others.

The solutions to the problems in each of these areas are different too. Driving change on the environmental front is most effective when governments are engaged via regulation and financial incentives. Consumers have more power when it comes to social issues. Investors have long recognised that they may be best placed to encourage progress on governance through engagement, votes or, more crudely, divestment.

Perhaps the real conclusion from all this is that, quite rapidly, ESG investing is becoming just plain investing. Companies that rate highly on the imperfect and inconsistent sustainability measures that we currently have perform well in stock market terms because they are, quite simply, better companies.

It makes sense to work towards common standards for fair comparison, but I suspect there will always be an extensive menu of these, not a single aggregate number for every company. Environmental, social and governance factors are just too varied to be corralled into one framework in the way that a company's income statement and balance sheet have been by the adoption of standardised accounting principles.

While we're working out how to measure sustainability ourselves, perhaps we could do worse than getting the kids from Tower Hamlets in to surprise us.

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