February 27, 2023 — The popular ESG movement advocates judging firms, not just by what they generate for shareholders in short-term profits, but by their emphasis on environmental, social, and governance goals. The movement has its detractors, particularly in the United States. A counter-movement is gathering steam. It would prohibit some financial institutions from investing in firms that follow ESG practices.
To be sure, ESG does warrant some skepticism. Often, corporate commitments are essentially mere exercises in public relations. But those who, in the name of economic freedom, would ban private investors from pursuing ESG goals are logically confused.