Why the fuss about ESG investing?

Darcy Hitchcock

Congress recently voted to overturn a rule allowing fund managers from taking into account environmental, social and governance issues when they invest in companies.

The U.S. Senate voted 50-46 to adopt a resolution to overturn a Labor Department rule making it easier for fund managers to consider environmental, social and corporate governance, or ESG, issues for investments and shareholder rights decisions, such as through proxy voting.


Through the Republican lens, these look like liberal issues: climate change, social justice, transparency. They think integrating ESG into investment decisions pushes that liberal agenda at the expense of returns. Here’s what they don’t understand.

  • Many studies have shown that ESG screened portfolios perform as well or better than ones that don’t.
  • ESG investing is actually more about managing risk, not returns. By not allowing pension managers to take these issues into consideration, they’re making the pensioners take on more risk. Do you…

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