Bloomberg and NewsBusters Show ESG Is Neither Virtuous Nor Profitable

From ClimateRealism

By Linnea Lueken

A recent Bloomberg article, covered by NewsBusters, shows the Environmental, Social, and Governance (ESG) investment trend that has gained popularity in the business world in the last few years is not a profitable bet for investors, nor will it guarantee any of the environmental promises made. The Bloomberg analysis shows that the “woke” ESG movement is a scam.

The NewsBusters article, “Bloomberg Columnist Smacks ‘Apostles’ of Woke ESG Movement,” describes the paywalled Bloomberg piece, agreeing with the position of writer Adrian Wooldridge. NewsBusters says that Wooldridge “blasted the ESG movement and its super-woke cousin, the diversity, equity, and inclusion movement (DEI).”

The two movements “powered leftist investment giants like BlackRock Inc., State Street Corp., and Vanguard Group Inc. 

The Heartland Institute has also revealed the ESG movement as a farcical and cynical attempt to cash in on green movements and wokeness, resulting in the suppression of fossil fuel development, while providing little or no environmental or social benefit.

ESG investment funds are targeted portfolios that choose to invest only in companies that meet established environmental, social, and corporate governance goals set by woke activists and elite fund managers. Instead of investing based on traditional economic performance indicators, like, profits, return on investment, long or short term stock performance, record of repaying loans, etc., investors look at a company’s stated commitment to goals such as, net-zero carbon dioxide emissions, union membership, gender and sexual diversity in the board room, and other distinctly progressive positions. Banks and financial institutions apply ESG scores to often unwitting companies, and a low score can mean your business is passed over for investment.

Fearful of losing out on cash flow, businesses pledge to go green—even if they don’t deliver functionally, instead relying on carbon offset purchases. This does not reduce emissions, and it also is only feasible for larger companies.

It is a lose-lose for investors, the public, and the environment. Bloomberg columnist Wooldridge explains, in reality “companies in ESG investment portfolios violated more labor laws, paid more fines and had higher carbon emissions than those in non-ESG portfolios sold by the same institution.”

As Heartland Daily News writer Eileen Griffin revealed, here, ESG portfolios are actually riskier than others, citing a Wall Street Journal report that found the average volatility of funds in the S&P 500 is 15.04 percent, while ESG funds sit at 15.46 percent. A half of a percent may not sound like a lot, but when large amounts of money are invested, it’s a real consideration. It moves markets when the U.S. Federal Reserve Bank raises or lowers interest rates by half a percent, and an additional half percent return on investments overtime makes a huge difference in retirees’ pension funds performance. ESG funds, Griffin says, are also more expensive than others, and since there is no global standard of measurement for their performance, the lack of information makes them a riskier bet.

It is becoming more common for some media sources and public figures to show skepticism towards ESG investing. Even major U.S. banks and climate-alarm friendly publications like the Wall Street Journal have expressed concern that ESG does more harm than good, as pointed out by Climate Realism articles here, and here.

In addition, numerous states have also begun to wake up to the damaging effect of ESG-focused investment. States like Texas, Kentucky, Oklahoma, Florida, West Virginia and others, have already either passed legislation blocking the de facto social credit score system that is ESG, or have withdrawn their public pension funds from fund managers lobbing for ESG mandates and investments and fossil fuel divestment. At least 19 other states have proposed similar legislation.

These are positive steps. One can only hope media outlets like Bloomberg and NewsBusters continue to publicize the false equity and environmental claims made by ESG directed funds and companies, and their poor economic performance.

Linnea Luekin

Linnea Lueken

https://www.heartland.org/about-us/who-we-are/linnea-lueken

Linnea Lueken is a Research Fellow with the Arthur B. Robinson Center on Climate and Environmental Policy. While she was an intern with The Heartland Institute in 2018, she co-authored a Heartland Institute Policy Brief “Debunking Four Persistent Myths About Hydraulic Fracturing.”

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Tom Halla
October 2, 2022 6:22 am

I wonder why ESG “ investing” is nit considered embezzlement, diverting company funds to a personal political or religious cause.

Kevin kilty
Reply to  Tom Halla
October 2, 2022 7:51 am

Sort of like why climate change policies that are economically ruinous and the rhetoric of which not even capable of addressing the basics of a make believe problem are not recognized as a state established religion . . .

Joseph Zorzin
Reply to  Kevin kilty
October 2, 2022 1:54 pm

Right- old time religion was to save our souls- this new religion is to save the Earth.

Steve Case
Reply to  Tom Halla
October 2, 2022 7:52 am

I’m hoping for a class-action lawsuit. I told my broker I’d join one if that happens.

roaddog
Reply to  Steve Case
October 3, 2022 3:31 pm

Steve,
That is a brilliant idea.

2hotel9
Reply to  Tom Halla
October 2, 2022 7:54 am

I asked my financial advisor that a week ago, he said it appears to be exactly that, especially since the activity is being hidden from investors.

n.n
Reply to  Tom Halla
October 2, 2022 9:55 am

Case-in-point: Diversity [dogma] (i.e. color judgment, class-based bigotry), Inequity, and Exclusion (DIE) doctrine.

Peta of Newark
October 2, 2022 6:29 am

UK Government wholeheartedly agrees, hence this:
https://www.nsandi.com/products/green-savings-bonds

3.3% fixed for 3 years, no early encashment – while interest rates are generally reckoned to be heading 5%+ before long.
(Being Government bonds maybe there’ll be no tax on the interest)

Gary Pearse
Reply to  Peta of Newark
October 2, 2022 8:44 am

Bonds are different than shares in a company. It’s okay for investments that have a fixed percentage payout, even if the investment is used for stupid non-beneficial purposes. One is free to attack government for being stupid as a separate matter though.

oeman 50
October 2, 2022 6:57 am

One thing extra: ESG gives cover for corporation management that lean left personally and would like to have this slant anyway. What a crock.

Curious George
Reply to  oeman 50
October 2, 2022 8:32 am

The ESG way is the Sri Lanka way.

Smart Rock
Reply to  Curious George
October 2, 2022 12:45 pm

Espouse Senseless Gobbledygook
Emulate Srilanka, Go broke
Exhibit Self Glorification

Discrimination, Exclusion, Intolerance
Demonstrate Extreme Incompetence
Destroy Everyone’s Investment

James Snook
October 2, 2022 7:04 am

‘its super-woke cousin, the diversity, equity, and inclusion movement (DEI)”

Frightening!

This disease of virtue signalling is not just permeating the corporate world, because in the U.K. the Royal Air Force has recently admitted that it is recruiting on the basis of DEI rather than on the highest competence. They have to meet their stupid self imposed DEI targets.They may have since been forced to moderate their approach due to the resultant outcry, but it beggars belief that they were prepared to accept anything but the very best for the service in the name of DEI.

Kevin kilty
Reply to  James Snook
October 2, 2022 7:33 am

it beggars belief” proves a succinct summary of all cults, doesn’t it?

roaddog
Reply to  Kevin kilty
October 3, 2022 3:33 pm

That which cannot be measured, must demand belief.

Pflashgordon
Reply to  James Snook
October 2, 2022 7:50 am

After 43 years in the professional world, with ne’er a complaint against me by anyone, my boss just sentenced me to take “DIE” training (yes, I meant to say DIE). I took it quite personally, as an assault on my character, but I later learned this is not personal. It is seeping into the organization, and others are being assigned DIE. They supposedly gave me a choice of how/where to take it, so I created my own curriculum of trustworthy books to read. Bzz! Wrong answer!

They forced me to take DIE through LinkedIn Learning. Hilariously, of the seven segments, all were taught by women, and four of those were black. So much for diversity. They had to be subtle so as to not inflame their students, but their examples and video skits were invariably biased in one direction, anti-male, anti-white, anti-Christian, pro-gay. They even willfully misinterpreted the Bible (the so-called golden rule), saying that is not good enough. They insisted on the “platinum rule.”

Pflashgordon
Reply to  Pflashgordon
October 2, 2022 7:56 am

Interestingly, in the culture at large, those promoting ESG and DIE are anything but kind and tolerant to anything that isn’t congruent with their narratives. Notice that the word “tolerance”, in vogue by the woke only a few years ago, has been tossed in the dust bin. Back then, when the lunatic fringe were in the distinct minority and not in power, they were all about tolerance, but when in power, they have no need for it.

william Johnston
Reply to  Pflashgordon
October 2, 2022 8:29 am

I don’t think the term “tolerance” has been abolished. However, it is the definition of same which has been severely tightened. IOW, tolerance is now accorded only if you agree with the promoter.

roaddog
Reply to  Pflashgordon
October 3, 2022 3:23 pm

There is a lunatic Presbyterian pastor here in southeast Wyoming who writes guest articles for the local daily newspaper, and his fiery writings are the most hateful things I’ve ever seen in newsprint. He thrives on mass generalizations about anyone (75 million Americans, at last count) who doesn’t agree with him, jot and tittle, about every detail of government and political policy. Intolerant doesn’t begin to describe it.

Kevin kilty
Reply to  Pflashgordon
October 2, 2022 7:56 am

I was forced to attend some sexual harrassment training about thirty years ago. It was organized by and led by a person who was later found to be the biggest harasser of women in the whole organization. One cannot make this stuff up.

H.R.
Reply to  Kevin kilty
October 2, 2022 9:22 am

Sexual Harassment Training, eh?

So, are you a lot better at sexual harassment now that you have been properly trained for it?
😉

When will management start requiring anti sexual harassment training?

Bill Powers
Reply to  Kevin kilty
October 2, 2022 11:51 am

It is were woke was born or created like the Frankenstein monster, 30 years ago. Sexual Harassment training was adopted by most corporations with HR departments run primarily, majority women, in order to pre-empt law suits.

But is was very one sided and dangerous to ones career. I Had a female employee confess to me that she fabricated a sexual harassment charge against a production manager that she didn’t like. Got him fired. When I brought this up to the HR rep conducting the harassment seminar I was report to the VP. Even back then resistance was futile and could cause cancellation.

Nobody that I have ever worked with is for sexual harassment. But when the private sector self regulates to ward off the Tort lawyers, there is no defense for the innocent. Get on your knees or get out.

Last edited 2 months ago by Bill Powers
michael hart
Reply to  Bill Powers
October 2, 2022 2:50 pm

It’s not much fun being sexually harassed by women in the US university hospital environment, even when other men think that should be a male fantasy.

Many of the women doing it may just think they are flirting, but you know you are almost powerless and not in a safe position if you tell them to either put up, shut up, or just let you get on with your job and quit with the little verbal asides.

No, I’m not bragging. All you need is the term Dr in front of your name. But a white lab coat and an ID badge probably helps too, for any men fancying a career change.

Gary Pate
Reply to  Kevin kilty
October 2, 2022 11:52 pm

Just claim to be trans & you can get away with anything….No matter what you do you are the victim.

roaddog
Reply to  Kevin kilty
October 3, 2022 3:35 pm

So he was speaking from experience. Reminds me of Hillary Clinton, once again on a rampage, recently raging about Trump’s collusion with Russians.

michael hart
Reply to  James Snook
October 2, 2022 2:31 pm

The armed services have one lucky thing going for them: When it looks like some real fighting men might be needed, there is a sudden rush of unplanned pregnancies.
(I know, I know. It would be better if they didn’t have to take them on in the first place.)

At the time of the Falkland’s conflict, I recall some outraged mother telling TV that her son didn’t join the military to go and die in the South Atlantic. I recall wishing to tell her that her son signed up to go and die where ever his government told him to. That’s why I wouldn’t, but can have a lot of respect for those who do.

roaddog
Reply to  michael hart
October 3, 2022 3:37 pm

Hopefully her son actually signed up to go and not die wherever his government instructed him.

Greg Shark
Reply to  James Snook
October 3, 2022 1:58 am

The upside is that in times of war the RAF can then get rid of its low scoring recruits unfortunately usually at the expense of aircraft

SAMURAI
October 2, 2022 7:06 am

Adherence to ESG assures: 1) the US will waste $3 trillion/year on just maintaining the infrastructure of an insane wind/solar grid (which will kill the economy), 2) a gigantic centralized Big Brother tyrannical government with massive taxes, regulations, mandates, dictates, price controls, severely restricted property rights, and the death of free-markets (which will kill the economy), and 3) hiring and corporate management will be based on intersectionality rather than merit, skill, performance, intelligence, and success (which will kill the economy), so yes, ESG will absolutely destroy the economy, which is not good for business nor in creating a society where anyone outside the ruling elite class would find even remotely enjoyable…

Kevin kilty
October 2, 2022 7:44 am

I think the results of BlackRock itself provide an example in point. It trades today at about 55% of what it did in Nov. 2021 at its peak. As people have awakened to the serious incompetence of the Biden Administration, much of which is kept afloat by the gaseous ideas embedded in ESG, DEI, etc., and the fakery of ESG, DEI etc. for economic growth and productivity, down goes Blackrock quite a bit harder than the markets as a whole.

Steve Case
October 2, 2022 7:46 am

So right after WUWT ran “America Is Successfully Pursuing ESG = Extreme Shortages Guaranteed” September 22nd, I called my broker to say the I’m concerned about how much Vanguard I’ve got in my Individual Retirement Account (IRA) because of ESG. I said if there’s a class-action lawsuit formed over this issue that I would join it.

The only way that’s going to do any good is if I’m not the only one to call up and complain.

John Hultquist
Reply to  Steve Case
October 2, 2022 10:02 am

Steve,
Vanguard has ESG type funds, but you have to ask to be (buy) invested in these. Many funds overlap because of indexing, so you will likely own stocks in companies from the ESG type if you also own the total stock market fund.
 Vanguard’s ESG U.S. Stock ETF [ESGV] is down (minus) 27.77% while the
Total Stock Market Index Fund [VTSAX] is down (minus) less at 24.89%.
Both of these are index funds, but Vanguard does have actively managed (stock pickers) ESG strategy funds. One such [VBPIX] is down 39.06% at the end of September.

Steve Case
Reply to  John Hultquist
October 2, 2022 12:13 pm

Thanks for that. Some time last year I called the broker about ESG and he told me about what you said. But nothing is going to happen unless there is pressure to do so. One post here today says that there are lawsuits beginning to be filed. No Links but if true that’s a good sign.

2hotel9
October 2, 2022 7:55 am

Fiduciary Responsibility. The lawsuits are already starting.

Steve Case
Reply to  2hotel9
October 2, 2022 8:02 am

The lawsuits are already starting.
____________________________

Good news, you gotta link fer dat?

Doonman
October 2, 2022 8:04 am

My 401K balance has lost 30% of its value in 9 months. I’m not impressed with anyone’s investment strategies.

John Hultquist
Reply to  Doonman
October 2, 2022 10:06 am

What have your gains been since you began investing?
S&P 500 Returns since 2008 (officialdata.org)

AGW is Not Science
Reply to  Doonman
October 2, 2022 11:23 am

Let’s go, Brandon…

roaddog
Reply to  AGW is Not Science
October 3, 2022 3:45 pm

The greatest paean to Free Will recorded to date:
We The People – YouTube Music

STRONG LANGUAGE ADVISORY

MarkW
Reply to  Doonman
October 2, 2022 2:57 pm

Everybody loses money in a bear market. Blame Biden for crashing the economy and the markets.

roaddog
Reply to  MarkW
October 3, 2022 3:53 pm

He has created some fabulous buying opportunities, albeit unintentionally.

DHR
October 2, 2022 8:09 am

ESG and DEI investing makes money for fund managers and stock brokers. If they can convince a bunch of people to sell their oil and gas stock and purchase stock in a sunflower farm run by a female, crippled operator, they get commissions. If they convince owners of stock in the female crippled operator farm to switch back to oil and gas stock instead, they get commissions. It’s all about the churn hence the enthusiasm of some fund managers and stock brokers.

RLu
Reply to  DHR
October 2, 2022 11:48 pm

If they convince people to sell oil stock …
their friends can grab lucrative stock, cheap.

Gary Pearse
October 2, 2022 8:36 am

I might have to scratch Bloomberg of my shaming list of those supporting crimes against humanity. They would have to stop funding néoenviro-activist lawyers they pay to work for wokie state Att.Gen offices to sue oil companies, though.

Charlie
October 2, 2022 9:24 am

Interesting article here about how this rot began. Featuring a failed Aussie rocker/eco activist, a bloke who wrote for rubbish British tabloid newspapers and, of course, the UN.

The United Nations free-thinkers who coined the term ‘ESG’ and changed the world | Euromoney

markl
October 2, 2022 9:46 am

The Marxists are out of the closet and going for broke to capture world dominance with their ideology …. hence Agenda 21. ESG, DEI (new to me), and AGW are nothing but blatant attempts to gain control of society with social and emotional issues that appeal, on the surface, to everyone but are just fronts to build support. I believe the West is too educated to fall in the trap and complacency will be traded for indignation and action as people lose more and more of their lifestyle and freedoms.

Mike Lowe
Reply to  markl
October 2, 2022 12:52 pm

The West too educated? I challenge that assumption. Just look at the mostly-female schoolkids waving placards at most street demonstrations against the supposed “Climate Emergency”! Usually the opposition to those technically-illiterate youngsters comes from we older folk, who will soon pass on. Hopefully, some of those uneducated schoolkids will eventually mature and understand science – and even become adherents to WUWT!

roaddog
Reply to  Mike Lowe
October 3, 2022 3:47 pm

And to think Greta was a dropout. She didn’t even complete the full and mandatory indoctrination.

Brad-DXT
October 2, 2022 9:49 am

The reason Blackrock, Vanguard, etc. have an influence on companies is that they vote the shares for corporations instead of allowing the companies’ boards to accept their proxies.

If an investment company doesn’t like the management decisions, they can sell their shares and invest in something else. There is no reason for an investment firm to influence another company’s decision making process other than the trading of shares.

n.n
October 2, 2022 9:54 am

The toxic Green Blight is processed through labor and environmental arbitrage, shifted responsibility, and renewable energy. It’s a viable conception for people prone to ethical religious hooks with em-pathetic appeal. At least while progressive prices are either shared, subsidized, or obfuscated.

Slowroll
October 2, 2022 11:12 am

I find it curious that so many corporations appear to be on this foocokta “woke” bandwagon nowadays. In the 80s and 90s, I spent a lot of time meeting with CEOs, other management and engineers around the world and never met one that appeared to be a lefty. Most in fact were pretty solid rightwingers. I can only conclude they are just avoiding the torches and pitchforks because they’re being extorted.

Dave Fair
Reply to  Slowroll
October 2, 2022 3:14 pm

Being personally responsible for results (CEOs, engineers, etc.) pretty much guarantees a conservative outlook. That is, in normal times. Maybe we’ll go back there some day.

roaddog
Reply to  Dave Fair
October 3, 2022 3:51 pm

The woke pandemic has so badly infected business today that we are going to see a lot of outright business failures. Merit has no place in the culture, performance can’t be measured, and bankruptcies will ensue.

Gary Pate
October 2, 2022 11:47 pm

Check out the “In the Tank” podcast from Heartland Inst. recorded every Thursday. It’s on Youtube & Rumble in video form. They regularly talk about the dangers of ESG insanity.

Eric Vieira
October 3, 2022 12:48 am

ESG is a tactic used to devaluate a lot of businesses, especially conventional energy producers. This then allows the “big three” to come in and mop them up cheap …
With the ensuing energy monopoly, these businesses will then be .. very .. profitable.

roaddog
October 3, 2022 3:30 pm

The most frightening thing about this trend is the subjectivity, and therefore immeasurability of not only the supposed disease, but also the alleged remedies. Given the intangible nature of offenses committed by the unwoke, there can be no identification of, nor arrival at a measured endpoint when the remedy has taken hold and succeeded. The application of remedies will therefore be infinite; which is to say, an eternal application of nauseating solutions to a non-existent problem. Its only money.

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