6 Comments

It's all pretty moot because investment performance drives flows. If ESG generates alpha, then the dollars will flow toward ESG-friendly managers. If it generates negative alpha, it won't and the whole thing will be abandoned quietly. Ah, capitalism.

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I've become a bit curious about the "help incumbent oil producers by discouraging fossil fuel investment" theory of ESG, but have no idea how seriously to take it.

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There is anecdotal evidence that investment in ESG initiatives is slowing down; and the slate of defections from the insurance industry's Net-Zero Alliance is a grim sign that the GOP is successfully sabotaging efforts to fight climate change at a key point.

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My interest is that there are seriously large institutional investors starting with Black Rock who are defending this policy. Large enough where corporations are catering with their marketing and policies to have access to their capital. The influence exerted is large enough to affect change. I can’t help but think that the WEF is involved with these corporate CEO’s to create this new policy. However the definitions of what constitutes ESG is not defined.

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I am surprised to learn that ESG is driven by the Investment industry and that politicians are using it for political reasons, rather than for some underlying principle. I was also surprised to learn that for public corporations, tangible assets make up a minimal amount of the value of their market capitalizations compared to 50 years ago. Therefore, intangible assets make up the balance of the market cap, of which ESG value is but one. For the global corporations, the threats they face are less economic and more environmental, social, and political in nature. Hence monetary value has been assigned to their ESG position. Enlightening, indeed! Whether or not this is sound investment logic is one matter. In my mind it says more about the state of our monetary system. But so far, its holding together.

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"There was no way the GOP could get the necessary 2/3rds support for an override in either Chamber of Commerce." I think you meant "either Chamber of Congress" although I doubt that Chambers of Commerce want to ban ESG either.

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