{"id":3857,"date":"2022-11-15T19:54:30","date_gmt":"2022-11-15T19:54:30","guid":{"rendered":"https:\/\/www.rubinwealthadvisors.com\/rubinreport\/?p=3857"},"modified":"2025-05-16T12:16:16","modified_gmt":"2025-05-16T12:16:16","slug":"ten-reasons-that-esg-is-bad-news-for-investors","status":"publish","type":"post","link":"https:\/\/www.rubinwealthadvisors.com\/rubinreport\/ten-reasons-that-esg-is-bad-news-for-investors\/","title":{"rendered":"Ten Reasons Why ESG is Bad News for Investors."},"content":{"rendered":"\t\t
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Slowly, but steadily, more and more Americans are becoming familiar with the term ESG (Environmental, Social, and Governance). This three-letter acronym is designed to veil a collectivist\/fascist corporate approach to business that has been taking hold in publicly traded companies, mutual fund companies and rating agencies over the past decade. It stifles individual liberty, free market capitalism, and returns on investment.<\/span><\/p>

Simply explained by its supporters<\/a>, ESG is represented as being:<\/p>

\u2026a set of standards for a company\u2019s behavior used by socially conscious investors to screen\u00a0potential investments.<\/p>

Environmental criteria consider how a company safeguards the environment, including corporate policies addressing climate change, for example. Social criteria examine\u00a0how it manages relationships with employees, suppliers, customers, and the communities where it operates. Governance deals with a company\u2019s leadership, executive pay,\u00a0audits,\u00a0internal controls,\u00a0and shareholder rights.<\/p>

One of the problems that conservatives have is their tendency to surrender language. That habit has played right into the hands of the little dictators from Blackrock and Vanguard who have been able to shove this collectivist approach to organizing economic activity right down America\u2019s throat. After all, how can you argue against companies \u201csetting standards\u201d to be \u201csocially conscious,\u201d and using \u201csocial criteria\u201d in deciding how they \u201cmanage relationships?\u201d\u00a0 These things sound good to most people for one simple reason:\u00a0 They sound good<\/em>!<\/p>

The truth, however, is that this near-Orwellian doublespeak used by ESG advocates is nothing more than lipstick for the pig we all know as socialism (centralized planning, management, and oversight of political, social, and economic activity). For those inclined to think critically, here are ten good reasons why ESG policies are not at all what the flowery language of WEF-types suggest:<\/p>

  1. ESG deflects attention away from maximizing shareholder value:<\/li><\/ol>

    When a company starts to make decisions based upon social engineering principles instead of principles relating to maximizing return on investment, they will by definition sacrifice the latter in service to the former.<\/p>

    1. If you want<\/em> companies to move away from maximizing shareholder value, do you really believe<\/em> that they will? The ESG paradox:<\/li><\/ol>

      Since companies maximizing shareholder value has been the focus of free market capitalism since it was first truly unleashed during the Industrial Revolution in Great Britain during the 18th<\/sup> century, do you really believe that when they say they are supporting ESG agendas they are stepping away from that traditional role? Herein lies a bit a of a paradox for investors to consider.\u00a0 If you really believe in ESG then you might want to take a lesser return on your investment in pursuit of serving the \u201cgeneral will.\u201d But then you are left with the problem of trusting the company to really support your shared collectivist vision.\u00a0 What if they cheat?<\/p>

      1. ESG-reported compliance efforts can be used as an excuse for a company underperforming:<\/li><\/ol>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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