Rep. Byron Donalds, R-FL, recently pointed out the obvious: Environmental, Social, and Governance (ESG), standards are not only ideological but also unprofitable. Donalds, a former investment advisor, explained why ESG standards are a bad idea.
Donalds spoke at a House Financial Services Committee Hearing about ESG, last week. The Republican congressman claimed that Democrats use ESG as a way to achieve political and social goals without going through government: “So, this works [for them] a lot more when you have small groups of activist shareholders who bring board proposals ad nauseam. They kind of overwhelm C-suite to accomplish these things via the corporate sector which you couldn’t get through the legislative system.” “So I can understand why they aren’t focusing on it.”
ESG was founded on a hoax based on the false prediction of an impending climate catastrophe, which has been predicted for over 50 years.
Donalds continued by saying that it’s important to focus on the “real consequences, the real-world financial implications of ESG policies on our capital market,” he said. Donalds noted that as a former Wells Fargo Financial Advisor, he is qualified to analyze the issue. “I was a financial advisor. I did my job. He said that he would never recommend ESG funds to his clients because they were more expensive and did not provide any returns.
Donalds cited the business giant BlackRock to illustrate his point (transcript provided by MRCTV).
BlackRock’s ESG-screened S&P500 ETF (exchange-traded fund) returned a twenty percent decline in 2022. It lost 20% of its value.
Donalds explains that ESG invests client money in companies that are less profitable and therefore do not produce high financial returns. ESG can also lead to the refusal of capital to companies that are not woke, despite their potential for profit. The congressman said that this is not how the free market should work. He insisted that the free market wasn’t created to have such a chilling effect. “This chilling effect is completely different and is antithetical to free markets.”
Donalds also criticized a proposal from the Biden Administration for a Securities and Exchange Commission Rule. The rule would require a significant investment in time and money for gathering environmental information, even if the information was irrelevant to a company’s operations.
The material aspect is important to the financial operations of a company because the investment is in the company and not the environment at large. It is also not an investment into the social system of the United States or the entire world.
Leftists don’t care about the economic and business damage their policies cause as long as it means forcing everyone to bow down to their political ideology.
