ESG Is the Opium of the Investors

In the past four years, there has been a sudden adoption of the Environmental, Social, and Governance (ESG) framework in financial analysis, corporate reporting, and investment firms. Its presence has increased several times over in almost every metric, from the number of ESG funds and the assets that are in them, to the ubiquitous job postings that reference it.

For liberal reformers, this is the latest attempt to affix a human face to capitalism; for financial market purists, it is a serious breach of fiduciary duty. This combination of sudden adoption and partisan ideological interpretations has led to ESG becoming a serious political issue. Both these narratives fundamentally misunderstand the role of the finance industry in production, and what little power it actually has to direct such goals at all.

 
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