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ABOUT ESG Triple Pundit... Anti-ESG Efforts to Restrict Responsible Investing Will Cost Taxpayers Billions 
wall street sign - new york stock exchange - anti-esg policies threaten ESG investing Original article: https://www.triplepundit.com/story/2023/anti-esg-cost-taxpayers/770481 Peter Burgess COMMENTARY I am not sure that I understand the logic of this article. I have been outspoken about ESG being a bad metric of corporate performance and poor indicator of investment quality. Rather I see ESG as an example of 'greenwashing' making it possible to have a conversation about corporate performance with having to associate environmental performance and social performanse with profit (economic) performance. Substituting 'governance' for 'profit' makes it possible to uncouple profit performance and consider profit performance independent of the other impacts. This may be convenient, but at its core it is wrong. The core framework of TrueValueMetrics (TVM) is about Social, Environmental and Economic performance and impact ... all three of these being of similar importance and weight in all computation. All of these are interconnected in a variety of ways. All of the activities in the socio-enviro-economic system have both good and bad impacts, and these activities can result in impact on any or all of the three capitals, social, emvironmental and economic. The core TrueValueMetrics framework has a lot in common with conventional double entry accounting but applied to these three main dimensions of performance (social, environmental and economic). To make life interesting ... TVM avoids the use of money as the sole metric in the framework. Separate units of measure are used for social impact and environmental impact while money remains in use for economic impact. The use of money for economic impact should probably be replaced by some other metric because money has substantially changed in value over time and is now driven by market or supply and demand considerations which is not a good way of defining a measure. The reality that many economic measures are adjusted to reflect 'purchasing power parity' or PPP confirms that the money measure is seriously compromised for meaningful analysis. Taken together, ESG and GDP make a nonsense of much of the analysis of socio-enviro-economic performance ... but this does not seem to matter to rich and pwoerful investors who are better able to game these measures than they would be able to if the measures were fully to embrace the TrueValueMetrics framework. We shall see what the future will hold. Peter Burgess | ||
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Anti-ESG Efforts to Restrict Responsible Investing Will Cost Taxpayers Billions
Written by Mary Riddle APR 04, 2023 U.S. President Joe Biden used the first veto of his presidency last week. The reason? ESG investing. On March 27, President Biden moved to reject a bill, approved by the House and Senate, that sought to overturn a new Department of Labor rule allowing U.S. retirement fund managers to take environmental, social, and governance (ESG) considerations into account in their investment decisions. The latest chapter in an ongoing political battle over ESG in the U.S., Biden’s veto came just a few days after more than 270 companies and investors signed an open letter pushing back against anti-ESG policies. In the letter, investors and companies emphasized the need to consider all financial risks and opportunities — including those associated with the climate crisis — in order to make smart investments. Calling their movement Freedom to Invest, these capital market leaders urged federal and state policymakers to protect their freedom to invest responsibly, noting they must be free to consider all material financial risks and opportunities in order to plan for the long-term. 'Managing risk and opportunities is our job as investors,” said Anne Simpson, global head of sustainability for Franklin Templeton, one of the letter’s signatories, in a statement. “Our duty and our loyalty are with the people who entrust us with their money. If we don’t pay attention to the accelerating frequency of severe weather disasters and the hundreds of billions of dollars they cause, nor to scientists’ forecasts for severe risk of more of that, and to entrepreneurial companies’ innovations for solving the resulting market needs, then we are not fulfilling our fiduciary duty.' The leaders noted that ESG considerations are not political nor ideological, but rather prudent risk management and investment considerations. The skyrocketing price tag of anti-ESG policies Anti-ESG legislation in a number of states is poised to cost taxpayers and retirees billions. State legislatures have been forced to roll back bills that sought to limit ESG investing practices, citing financial harm to state pension funds. Texas and Florida are continuing to push for anti-ESG legislation, even as Texas' anti-ESG policies have already cost the state millions. Pension funds in the state are warning the legislature that the most recent round of anti-ESG proposals could cost retirees in Texas $6 billion over the next 10 years. ESG is good for business Climate change, social injustices, and environmental catastrophes all threaten workforces, supply chains, global markets and long-term economic growth. At the same time, “strong climate action will bring tens of trillions of dollars in additional value to the global economy along with millions of new jobs in the coming decades,' the financial leaders wrote in their letter. Their claims are backed up by strong evidence. One recent study, for example, showed that companies with robust ESG programs saw a 9.7 percent revenue boost between 2019 and 2022, compared with a 4.5 percent boost for companies without ESG programs. The same study showed that 84 percent of companies that embrace ESG principles find it easier to attract investors and raise funds. The group of Freedom to Invest signatories highlighted the business case for ESG in their letter, writing: “Our consideration of material environmental, social, and governance (ESG) factors is not political or ideological. Incorporating these issues into financial decision-making represents good corporate governance, prudent risk management, and smart investment practice consistent with fiduciary duty. We factor financially material considerations, including the impacts of climate change, into our standard investment and risk management decisions, in order to protect our operations and our investments.” Even as ESG investing is facing backlash among some policymakers, ESG investing principles are growing in popularity. Almost $8.5 trillion in assets are currently managed by ESG-friendly investors, which is about an eighth of all total assets under management globally, and demand for sustainable funds is higher than for those that do not include ESG considerations. Image credit: Patrick Weissenberge/Unsplash Mary Riddle ... Mary Riddle is a writer and sustainability consultant based in Florence, Italy. As a former farmer and farm educator, she is passionate about regenerative agriculture and sustainable food systems. Currently, she and her husband also own and operate Italy in Season, a subscription box company with a mission to support small-scale Italian artisans and traditional craftsmanship. Read more stories by Mary Riddle
| The text being discussed is available at | https://www.triplepundit.com/story/2023/anti-esg-cost-taxpayers/770481 and |