ESG branding, now popular in all the uber-leftist colleges and universities, is fading away after it yielded the [should have expected] poor investment returns.
Wall Street virtue signalers embraced it as “sustainable investing” only to find that it’s an incredibly bad idea after only a three-year run. Funds are closing out and scrubbing their names as investors run for the doors with their billions.
The Wall Street Journal blames:
[Democrats] overburdened the market with “regulatory oversight, higher interest rates that have slammed clean-energy stocks, and a backlash that has made environmental, social, and corporate-governance investing a political target.”
“This really is the result of too many managers looking to cash in on increased awareness and demand for ESG investments,” said Tony Turisch, senior vice president at Calamos Investments.”
They forgot to mention that ESG is built on a faulty idea. Compelling companies to force social change alienates people. Trying to force far-left social justice changes with, say, beer as in Bud Light, is an incredibly bad idea. Pushing LGBTQIA++++ at Target costs money. People won’t shop there.
Harvard Business Review says this:
“To begin with,ESG funds certainly perform poorly in financial terms. In a recent Journal of Finance paper, University of Chicago researchers analyzed the Morningstar sustainability ratings of more than 20,000 mutual funds representing over $8 trillion of investor savings. Although the highest rated funds in terms of sustainability certainly attracted more capital than the lowest-rated funds, none of the high sustainability funds outperformed any of the lowest rated funds.
That result might be expected, and it is possible that investors would be happy to sacrifice financial returns in exchange for better ESG performance. Unfortunately ESG funds don’t seem to deliver better ESG performance either.” – Harvard Business Review
As for ESG becoming a political target, it was borne out of far-left politics and thus was always political.
Every idea tied to ESG was to further a far-left ideological goal. Ideologies are dangerous and have collapsed nations. Government picking winners and losers, funding leftist pie-in-the-sky nonsense, woke crazy, and virtue signaling all need to stop. It can’t fade fast enough.
Larry Fink and Black Rock are everywhere, and he is partly or mostly to blame. Watch:
Who is Larry Fink to force his social change on everyone else?