It is a mistake to confuse morality with being responsible for other people's money. Climate change is not itself a moral issue, but many who believe in it do so with an almost religious zeal.
Wall Street learned this the hard way. Public policy organizations that have studied this issue have found that companies that do not prioritize environmental, social, and governance concerns when making investment decisions or voting proxies at shareholder meetings do better for their customers than those that do. It was concluded that it brought about
This attracted the attention of small investors, who realized that their capital was being used to force American companies to go green, rather than to generate maximum investment returns. As expected, they complained.
Wisely, some of the industry's biggest companies have reversed course. BlackRock, the world's largest company, has backed away from previous commitments to so-called ESG considerations and announced, for example, that it wants to ensure that all group members use all customer assets. +” announced that they would be withdrawing from the company. Management to reduce emissions and support decarbonization.
Other companies, including JPMorgan Chase and State Street, have taken similar steps, cutting off the bouquet of American companies grappling with climate capitalism.
Climate change advocates who advocate eliminating fossil fuels from the world's energy mix say the switch they hope governments around the world will eventually mandate will make investors extremely wealthy on the ground. It makes the false but effective argument that it is possible to be wise enough to become a person.
This is a persuasive argument that has led several Wall Street bigwigs to mobilize the resources at their disposal to fight climate change, believing that it will become a profit center. Environmental investment will foster wealth-generating development in the market. Carbon credits will be traded. It's green meets green and everyone is guaranteed to have a great time.
They didn't take into account that for every Telsa, there are probably a dozen Solyndra companies waiting behind the scenes, soaking up private investment with government support and dooming them to bankruptcy, or I chose to overlook it.
If that happens, American taxpayers will be left in the lurch. Instead of making money with smart investments, you'll end up losing money as government bailouts increase federal spending, slow growth, and potentially raise interest rates.
When your business is making money, you need to focus on that. That's what people expect from you. BlackRock CEO Larry Fink, who used to actively promote ESG as an investment strategy, deserves credit for what appears to be a turnaround.
“Everything we do is done for our customers and is aimed at financial gain. Of all the things we have ever done, whether it is ESG or other issues, There's nothing that we're not doing for profit,” Fink said in October. “That is our fiduciary responsibility, and we live it every day.”
Climate change alarmists run around all they want like Henny Penny, shouting “the sky is falling” to everyone they meet. So far, their most dire predictions have not come true.
The North Pole isn't melting. Sea levels are not rising. If people want to worry about those things when investing their money or voting for shares at an annual general meeting, they are free to do so. They are even free to try to persuade others to emulate them. But when someone is managing someone else's money, their primary responsibility is to maximize the return on their client's investment, not to anyone or anything else.
It pays to use your skills and understanding of how the market works to help retirees live comfortably. It is a sin to pursue goals that some elites consider virtuous while exposing others to the possibility of poverty. At the end of the day, we're better off because when Main Street spoke, Wall Street listened.
Peter Roff is a former U.S. News and World Report contributing editor and UPI senior political writer, and is currently affiliated with several DC-based public policy organizations. He has written for numerous publications and regularly appears on international television to discuss U.S. politics. You can reach him at RoffColumns@gmail.com and follow him on Twitter @TheRoffDraft.
