ESG stands for “environmental, sustainable, governance.” It is a vague standard of corporate conduct that some forces want to use to guide investment. Yes, they want to expand the standards used when selecting stocks beyond financial criteria.
Most free-market supporters see this as a violation of traditional standards of fiduciary management.
Rupert Darwall of RealClearEnergy says it isn’t just elite leftists (e.g., Larry Fink, president of BlackRock) who support this criterion but also some conservatives.
“[B]oth ends of the political spectrum end up on the same page, accusing pro-market, anti-ESG critics of subverting free-market principles.”
What bothers Darwall in particular is recent writing by American Affairs senior editor Julius Krein. Says Darwall:
Krein argues that conservatives should drop their “silly pretence” in the efficacy of markets and promote a conservative version of ESG, incorporating “their own substantive goals”—an implicit admission that ESG is indeed a vehicle for promoting a political agenda. This is asking conservatives to accept two counterintuitive propositions: first, that Congress and the administrative state have the potential to be more efficient capital allocators than markets; second, that conservatives can impose their cultural values and political preferences on Wall Street and blue-state pension funds such as CalPERS, CalSTRS, and the New York State Common Retirement Fund.
Surely Krein is an outlier!
Image by Ahmad Ardity of Pixabay.