ESG in the News

There has been quite a bit of discussion about ESG lately.

One set was centered on the SEC doing investigations to make sure that funds and investment vehicles do not do greenwashing when setting up funds that base investments on a set of ESG criteria. The SEC is looking for “truth in advertising”.

The other pertains to an investor Vivek Ramaswamy who is out to fight against ESG and “woke” policies. Backing him is Peter Thiel and Bill Ackman.

I didn’t think ESG would become a hot political potato. I thought most of the world was coming to the conclusion that there was something going on with the climate and that we should do something about it. It seemed like quite a lot of companies have gotten on the bandwagon to try to reduce emissions or other climate impact. The constant flooding, heat waves, droughts, and other extreme weather seemed to have waken everyone.

I also thought that research has found that companies with diverse and inclusive leadership do better financially. Here’s McKinsey May 2020 research on inclusion and diversity. I though research coming from McKinsey would be compelling.

But apparently not.

Some super wealthy investors want to focus on maximizing profits for the shareholders and ignore the stakeholders or community or the future denizens or climate or diversity.

In other words, just focus on being greedy.

That stance is so tone deaf. These guys are smart guys BUT they are extremely selfish and tone deaf. It is very disturbing that they are willing to throw away the future because that future will impact them too maybe not as much as everyone else, but still. Research says diversity and inclusion improves the bottom-line. For such a bottom-line set of people, why are they ignoring that research?

This is why I say shareholders are not your friend. They just think about their pocket.

We’ll have to see how this battle goes. It’s very depressing that we have such selfish people. The depth of greed is astounding.