Rep. Byron Donalds (R-FL) recently noted the obvious: environmental, social, and governance (ESG) standards are ideological but not profitable. As a former investment adviser, Donalds explained exactly why woke ESG is a bad bet.
Donalds was speaking at a House Financial Services Committee hearing about ESG last week. The Republican congressman accused Democrats of using ESG to accomplish political and social ends without having to go through the government system: “So this works a lot better [for them] when you have small pockets of activist shareholders bringing board proposals ad nauseam and they kind of overwhelm the C-suite, if you will to accomplish these things through the corporate sector that you could not get through the legislative process. And so I see why they don’t want to focus on it.”
ESG is founded on the hoax of the supposedly impending climate crisis, which has been imminently—and wrongly—predicted for 50 years now.
It’s essential to focus on “real implications, the real-world fiscal implications of ESG policy on our capital markets,” Donalds went on. He noted that he was previously a Wells Fargo financial advisor, making him qualified to analyze this issue. “I was an investment adviser. I did the job. I would never invest my clients in ESG funds — because they are more expensive and the returns are not there,” he emphasized.
Donalds used business behemoth BlackRock as an illustration of what he meant (transcript by MRCTV):
If you look back to returns for 2022, BlackRock’s own ESG screened S&P 500 ETF (exchange-traded fund) was down twenty percent in 2022. It lost twenty percent of its money.
ESG invests clients’ money in firms that are not as profitable and thus do not yield high financial returns, Donalds explained. But ESG also leads to refusals to give capital to non-woke companies despite their profit potential. That’s not what should happen in the free market, the congressman said. “That kind of chilling effect is not what the free market was ever created to do,” he insisted. “That chilling effect is something completely different, which is an anathema to the free market.”
Donalds further slammed a proposed Securities and Exchange Commission rule from the Biden administration. The rule would require significant investment of time and money to gather environmental information—even environmental information totally irrelevant to a business’s operations.
What is material is what matters to the financial operations of the company, because the investment is into the company itself, not into the environment writ large, not into the social system of the United States – or the world, for that matter.
But leftists never care how damaging their policies are to businesses and the economy as long as they force everyone to kowtow to their political ideology.
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