Interesting spin: the reaction to the "environment, social and governance (ESG) investment trend." is the "infection", and the change. The "ESG trend" itself isn't another example of ideology driven investing to talk about.
- ESG is overbroad and contradictory, and funds that select investments solely based on emissions criteria would serve investors better [0]
- ESG is ineffective because it is rife with greenwashing [1]
- ESG is fundamentally unable to accomplish meaningful progress on social goals because profit-seeking will always take precedence in corporations [2]
I don’t think every ESG-related piece they publish needs to include a lengthy disclaimer that the publication itself doesn’t love ESG, just as their critiques of ESG don’t need to include disclaimers about the downsides of boycotting firms that offer ESG products, as mentioned in the article:
> Taking a stand can be expensive. Researchers at the Federal Reserve and the University of Pennsylvania have found that anti-ESG boycotts raised the cost of borrowing for Texan municipalities by $300m-500m as banks with ESG policies withdrew from underwriting bond sales.
[0] https://www.economist.com/leaders/2022/07/21/esg-should-be-b...
[1] https://www.economist.com/leaders/2021/05/22/sustainable-fin...
[2] https://www.economist.com/leaders/2022/09/29/the-fundamental...
The reality is ESG is just another gamed metric, if you want to do ethical investing that's probably not the best way.
Am in no way saying that a gas company should be included but the exclusion makes sense.
I think that's part of why people are disillusioned, because ESG lumps several incomparable verticals and quantitatively rank them.
A slightly flippant reading could be "How many kilo-tons of emitted CO2 is a 50/50 man to woman split in the workforce worth?" because that's pretty much how these are ranked.
It's not like they're all one thing.
> take precedence over the impact of the actual company
Either you think that social (and to a lesser extent governance) impact is impact or you don't and that will pretty much decide how you view ESGs. It's not as if Elon is ranting in a vacuum where those views don't manifest in real effects in the companies he owns and the wider political sphere. Regardless of how you feel about how S scores as they're currently measured and their worth as an ethical north star Musk companies don't get very many marks. And that's fine -- I think that's the point, it seems very purposeful. It seems that Elon only actually cared when that fact hurt his stock price, not on principle.
And I'm sure investing in 1789 Capital will skew the other direction and that's fine too. You won't hear me saying their indexes are illegitimate because they do what it says on the tin.
It's also not really American politics: concern for the global environment is a global movement. Most Western democracies have significant environmental planks in the platforms of whichever party is furthest left, and/or a whole Green Party.
Anti-environmentalism exists as more of a USA political movement, although it's starting to bleed into other countries (and into the financial world).
Happy Earth Day!