Be careful investing - ESG is not your friend

[The Green Barbarian]

I am seeing ads on TV now from big investment firms in Canada with taglines like "When you think of ESG, think "BLAH BLAH Investment Management", and I'm thinking, do people even know what this means, or why they should care about "ESG" in their investing? Or are they thinking that they should be investing with companies that focus on "ESG" because their brain-washed kids came home from school and told them that they have to "focus on ESG in their investing"? What is "ESG"? Why would anyone want "ESG" in their investment portfolio?

So, What Is ESG?

ESG — it's an acronym conservatives may have heard thrown around on cable news and in the pages of Townhall as those resistant to the woke agenda fight back on this new front being opened by the left to inflict their will on unwilling and sometimes unwitting Americans. But what is ESG and how is it being used? It's a question that keeps popping up in our comment section so we decided to dive deeper into ESG — which stands for environmental, social, and governance — and how it's being used as a bludgeon against the left's ideological opponents.

As Andy Puzder, the former CEO of CKE Restaurants — parent to Hardee's and Carl's Junior — has explained, the basic tenets of ESG are radical environmental policy — the so-called "green" energy transition, progressive social policy — requiring woke principles to be enacted within a company from the top down, and governance policies that see merit-based systems replaced with preferences based on race or sex.

These ideas and policies, of course, aren't new. But ESG has teeth where previous attempts lacked meaningful enforcement. That's because ESG has been adopted by some of the largest financial firms in the United States. Namely BlackRock, Vanguard, and State Street. Their holdings make them the number one shareholder in 80% of the companies in the S&P 500, Puzder notes. The power they get as shareholders allows them to force companies to implement ESG as upstream controllers of a company — whether all the Americans whose funds they hold agree with ESG or not.

Vivek Ramaswamy, who has launched Strive Asset Management — an anti-ESG alternative to the BlackRocks and Vanguards of the world — explained the nefarious way in which ESG-advancing firms consolidate power to inflict their radical will. "It's the money of everyday American citizens that's being used to advance this ideology that most of them actually disapprove of," Ramaswamy said on CNBC. "And that's a disconnect that we have to address." With Strive Asset Management, Ramaswamy is indeed addressing it by offering a competitive alternative.

The consequences of ESG, in addition to the forced woke-ification of massive American corporations, include a loss in financial benefit for the shareholders whose money the asset managers are entrusted to steward. Puzder explained that ESG "policies do not encourage profits" and, in fact, "ESG investing is a negative for profits, it's a negative for investor returns" and "it's only a positive if you're one of these progressive crusaders who's trying to get these issues through and force them down Americans' throats without going to the ballot box."

In a Wall Street Journal op-ed with former U.S. Rep. Diane Black (R-TN), Puzder noted that, "[t]o the extent portfolio managers use ESG to justify investing in companies that are less profitable than alternatives, they are imposing a tax on their clients in the form of reduced returns. But shareholders don’t agree to pay this tax, and most have no idea the extent to which it’s being imposed," Puzder and Black warned.

The pro-ESG crowd isn't going to be content to just inflict woke policies in corporations, either. Some, such as Alibaba Group president J. Michael Evans excitedly spoke at the World Economic Forum about an "individual carbon footprint tracker" that could be used to force compliance with restrictions on personal freedom.

In the not-so-distant future, "personal ESG scores" could also limit opportunities for individuals who don't abide by what ESG agenda-setters demand to get loans for businesses or homes and generally preclude Americans from full and free participation in the economy. The impact of such policies have already made themselves apparent when the big three credit card companies — American Express, Visa, and MasterCard — began coding firearm purchases differently, allowing them to track firearm owners and potentially stop sales or punish buyers.

Whether its requiring "carbon zero" goals, woke HR practices, or a quota for C-suites to have a certain number of racial or gender minorities in place regardless of qualifications or performance, the woke warriors using ESG already have the power to force such changes through the holdings of BlackRock, Vanguard, and State Street.

But how is their will actually inflicted on corporations? Well, through wielding their power as managers of a large number of shares in major companies along with assistance from the Biden White House and federal bureaucracy. "What they do is they go out and threaten these companies with adverse votes on director nominees or adverse votes on shareholder proposals unless they adopt these radical policies," Puzder explained.

Calling the situation "dystopian," Puzder noted how the federal government under Joe Biden has joined the ESG fight. "You've got the SEC talking about climate disclosures. You've got the Department of Labor wanting to make it so that 401k plans can have these investments that don't focus on returns, they focus on politics," he explained. "They're doing everything they can to empower these financial elites to take advantage of this incredible power they've acquired investing our money to force these companies to pursue this progressive agenda," Puzder added. "It's a shortcut around our democratic process to accomplish goals that they can't otherwise accomplish because they're not popular."

https://townhall.com/columnists/spencer ... y-n2614725

[The Green Barbarian]

Matthew Lau: First greenwashing, now diversity-washing. Let's scrap ESG

The analytical looseness characterizing discussions of corporate social responsibility, which Milton Friedman wrote about over 50 years ago, is ever more apparent. Last month, Bloomberg reported about “ ESG fund chaos ” over greenwashing concerns and widespread frustration among asset managers, as more than $125 billion in assets previously labelled environmentally responsible are now rated not to be, after all. It has been clear for some time that the “E” in ESG is hard to judge. Now a new paper jointly published by the University of Chicago’s Booth School of Business and Stanford University’s Rock Center for Corporate Governance suggests the “S” (standing for “social”) is on similarly shaky ground.

Many of the stated social objectives of business have to do with diversity and inclusion, but just as businesses can engage in greenwashing to exaggerate their environmental friendliness, so too can they use “diversity washing” to embellish the social good they supposedly do. The five co-authors of the Chicago/Stanford paper define diversity washing as companies talking more about diversity in DEI (diversity, equity, and inclusion) commitment disclosures than the racial and gender profile of their work force merits. Their conclusion, based on data for nearly all publicly-traded U.S. firms? “Diversity-washing firms obtain superior scores from environmental, social, and governance (ESG) rating organizations and attract investment from institutional investors with an ESG focus. These outcomes occur even though diversity-washing firms are more likely (than other firms) to incur discrimination violations and pay larger fines for these actions.”

Like the pervasiveness of greenwashing, high ESG scores for diversity-washers highlight the analytical looseness underlying corporate social responsibility. But an even more fundamental problem is why diversity should be linked to social responsibility in the first place. Employer diversity initiatives that reduce racial intolerance and other forms of unfair discrimination in the workplace are certainly beneficial, and in cases where these benefits – in terms of attracting and retaining workers and improving employee morale and productivity – exceed costs, they are profitable, too. But increasing racial and gender diversity is not per se beneficial, and a lack of diversity is not always evidence of discrimination or mismanagement.

The racial diversity of the wait staff in Chinese restaurants in the Toronto metropolitan area is approximately zero: just about everyone is of Chinese ethnicity. People of European and North American origin account for over 60 per cent of the population but approximately zero per cent of wait staff in such restaurants. People of East Indian (11 per cent), Caribbean (6 per cent), and African (5 per cent) origin are similarly underrepresented. Yet this complete absence of racial diversity is not evidence of Chinese restaurant owners’ corporate social irresponsibility or bad management, but simply reflects the facts that Chinese workers on average have better knowledge of the language, cuisine and culture, and are likelier to want to supply their labour to Chinese restaurants. If the restaurant owners tried for higher ESG scores by forcing the ethnic make-up of their staff to mirror the general population, this would be bad business management and, perversely, almost certainly require them to engage in unfair racial discrimination in hiring.

https://www.msn.com/en-ca/money/topstor ... 8d02ab7b30

[dirtybiker]

Thanks, I'll stick to Gold and....Sugar.

Some things never go out of style.

[Glacier]

Thanks, I'll stick to Gold and....Sugar.

Some things never go out of style.

Rogers Sugar is a good safe investment with a good dividend. Sugar is here to stay.

As for ESG, it's definitely not anyone's friend for the reasons posted above.

A quick summary...

[gertlush]

Meh, typical Repub histrionics, lots of noise, a lot... but no facts.

Prove to me it depresses shareholder returns.

Don't get me started on the larger question of how "shareholder returns" became holy writ.

[BC Landlord]

Stinks like something coming from the WEF.

[fluffy]

Sounds like something right out of the marketing department. Pretty words to make investors think that’s it’s not business as usual in the corporate sector. It would be a nice thought if it were true though, putting some ethics and social responsibility back into business.

[The Green Barbarian]

Meh, typical Repub histrionics, lots of noise, a lot... but no facts.

Prove to me it depresses shareholder returns.

Don't get me started on the larger question of how "shareholder returns" became holy writ.

The shoe should be on the other foot here, in terms of - prove to me it increases shareholder returns. I don't think you would be able to do that. In the end, what wins is this - hiring the best person for the job. They could be green and have three heads. Who cares.

[The Green Barbarian]

putting some ethics and social responsibility back into business.

only a true fool would believe NDP/union/idiot propaganda that ethics and social responsibility somehow "left" the business and corporate world. There is so much done by every day people regarding ethics and social responsibility, but the only thing "ESG" has added to this is broadcasting these things and going for the cheap virtue signal.

All this ESG "ethics" garbage does is grant non-ethical people who are the ones most attracted to this fraud legitimacy. These fraudsters are glomming on to ESG for the fake bonafides this ESG stamp gives them, which is nothing more than a legal license for them to keep stealing, under this fake virtuous banner. Like the rest of everything that is woke, this started with some sort of positive goals, mostly based on emotion like all woke nonsense, but now just like the man-made climate change fraud, it's been corrupted by scum who are using ESG to take what they can from people dumb enough to fall for this nonsense. It's all garbage.

[gertlush]

No, ESG investors are saying there are other considerations + shareholder returns.

Mr. Carls Junior guy says the whole thing is hogwash cause it lowers investor returns. But he offers no proof.

Why can't we have both?

[gertlush]

Besides, its a free market, go put your money somewhere else.

[BC Landlord]

Besides, its a free market, go put your money somewhere else.

There is a distinction in between market mechanisms and Ponzi schemes. The former is based on some tangible metrics.

[gertlush]

Besides, its a free market, go put your money somewhere else.

There is a distinction in between market mechanisms and Ponzi schemes. The former is based on some tangible metrics.

Ok, thanks. There is also a distinction between cats and dogs, whats your point? If we are concerned about Ponzis then lets talk crypto, SPACs etc

[fluffy]

There’s good money in wrecking the planet.

[A Concerned Citizen]

There’s good money in wrecking the planet.

The good money is taking all of yours and everyone else's so you are happy owning nothing and those that take your money are happier owning everything ...