The Hottest Trend in Investing Is Mostly a Sham
In March, 19 Republican governors issued a statement warning of “a direct threat to the American economy, individual economic freedom, and our way of life.” The threat in question was not one of the classic objects of conservative anxiety, like high taxes, government regulation, or socialized medicine. Instead, it was a bugbear of a more recent vintage: ESG investing.
ESG, which stands for “environmental, social, and governance,” purports to allow investors to put their money into companies that care about not just their bottom line, but their impact on the world. ESG has been one of the hottest trends in investing over the past five years. There are now numerous ESG indexes and hundreds of ESG funds, including from the biggest institutional investors, that collectively have garnered trillions of dollars in assets.
