Influential local US banks fight back against Republicans’ ESG attacks | Hacker News Reader

Influential local US banks fight back against Republicans’ ESG attacks

ft.com

https://archive.ph/0Bj8B#selection-1445.0-1445.70

After a decade+ race to the bottom with investment fees, ESG funds enjoy some of the highest fees out there. ESG == profit, and no big firm wants to be forced to eliminate their biggest profit makers and operate at a competitive disadvantage.

If you live in one of these states, you - the investor - will be paying higher fees for your non-ESG funds than people that live in states that let the market decide.

I think the idea is that when using ESG, the return WILL be less than it otherwise would be. Simply by having reduced options. Then because malfeasance is covered up with platitudes. No longer do companies have to try to be profitable, they just have to check ESG boxes. Then money is auto-funneled from workers to bypass taxes and is forced to be invested in these future junk funds.

The idea that you can exclude companies from investment consideration and claim to represent investors is so scammy, its technically illegal in my opinion. Legally, they are supposed to chase profits. That's the only legal goal.

If you accept the basic premise that a shrunken pool of investment opportunities is exactly equal to lost opportunity and profit, then ESG is illegal and has to go.

I don't see the big deal. People can yell and scream all they want, ESG is an illegal and self defeating mechanism that screws everyone.

ESG isn't even close to illegal. Investment firms offer hundreds of different funds to choose from, you pick the one you like best and go with that. This concept would be illegal with your reasoning.

But it's all irrelevant. A person that invests in a BlackRock S&P500 fund will pay fewer fees than a person that invests in a Texas-approved S&P500 fund. These two funds will have the same return over the course of your 40-year career, but the person with the BlackRock account will have tens of thousands of dollars more money. It's basic math.

If ESG is bunk, the market will reject it. In fact, billions of dollars have been pulled from ESG funds over the last year. I suspect that there will be an eventual equilibrium found, but that's just me. In the meantime, BlackRock is making serious cash on their ESG funds (higher fees). Money that firms that don't offer ESG funds aren't making.

So no one wants to put money in ESG. It auto-happens. And you've astutely noticed people are actively taking their money out of it.

How is this not unethical? An investment banker is making low return investments that a high percentage of people are actively rejecting, going out of their way to call or email and override their investment bankers on this one issue?

I'm not worried about the index fund investor or sp500 investor. It's the public pensions and people whose paychecks are autodeducted and invested that are the ones getting screwed.

As for illegal, the activists say no. Traditional investors and attorneys say perhaps yes. Here is one states AG stating ESG in investments is illegal, and suing.

https://www.wsj.com/articles/esg-may-be-an-antitrust-violati...

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