The ESG Bubble is Bursting

Cryptocurrency and environmental, social, and governance (ESG) funds have been rendered irrelevant by the current market and political turmoil. However, ESG is losing fans by the day while crypto’s future remains uncertain. Many people who support pet causes are worried about ESG’s lack of adherence to its principles and how it ‘greenwashes’ corporations who do, in their opinion, harmful things.

However, Republican lawmakers may pose a more significant challenge by trying to drain ESG funds of public pension money. Florida’s state pension fund managers have recently been prohibited from considering ESG requirements. According to the Arizona attorney general, political causes should not be funded with public funds.

As such, Public funds should avoid ESG investments due to their political nature. Taxpayers should not pay for underperforming funds because everyone does not share their political beliefs. There are already examples of this: using public-pension money in politically favored projects is widespread, but it can be expensive for taxpayers, so it should be kept from the public sector.

According to Bloomberg, the GOP is pursuing ESG funds by calling them woke investments. Values-based investing is always wrong, regardless of whether you support ESG values. There is no need to politicize everything – especially not public pension funds, which are already underfunded.

When markets are down, ESG’s extra cost becomes more evident. Fund managers or investors who now understand the added cost of ESG, are unlikely to accept underperforming funds. This may be why ESG funds are at their peak.

If you’re more interested in achieving financial gains instead of perpetuating underperforming woke strategies, call Rubin Wealth Advisors to speak to a professional with the same moral values as you.