Opinion Page: Has ESG Peaked?

Capitalism is reducing global poverty, according to the Borgen Project

From the Wall Street Journal, March 16, 2023:

A few years back various Wall Streeters were whispering that the political fad of investing with the so-called environmental, social and governance (ESG) agenda would continue to gain ground until the next bear market. Have the last year’s geopolitical events and investing losses plus recent market ructions finally brought a needed dose of reality? Even today such talk is generally confined to background discussions because Wall Street remains institutionally politically correct. But a welcome change toward focusing on doing right by shareholders may be in the offing. Such a change would also benefit the U.S. economy and human flourishing around the world. That’s because profit-seeking corporations, not politics, represent the most efficient path to fueling, sheltering and feeding a hungry world.

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It’s nice to be picking up good vibrations for efficient energy production. But let’s not get too carried away, because “stakeholders” who have no stake in a business obviously don’t suffer when it falters and may be largely insulated from market reality if the tax-exempt entities supporting them are large enough. Much damage has already been done as political agendas have been embedded in the policies of many Wall Street institutions, and there is no reason to expect the non-stakeholding “stakeholders” to abandon their influence campaigns. In fact this column is told that another conversation occurring in Houston last week was that the ESG crowd, having largely conquered the big banks, is now moving on to apply more pressure to insurers.

darryll jones