Utah pushes back on pro-Putin ESG financial analysis
EEnvironmental, Social and Governance, widely known as ESG, is a concept in finance that essentially uses “wake-up” as a measure of a company’s value or investment value. It is therefore a form of financial embezzlement. It is fundamentally dishonest to misrepresent the financial strength of a company by subordinating financial considerations to political judgments and doomsday superstitions.
But since corporate executives may not be convinced based on what’s honest, here it is in language they might understand: it could get you sued, and it could get very expensive.
This week, Utah began the much-needed pushback against the use of ESG principles by financial analysts who review government bonds. Gov. Spencer Cox and other state officials, enraged by the low and seemingly arbitrary ESG ratings, wrote a letter to rating agency Standard & Poors demanding that the ratings be rescinded. They demanded specific answers to several questions and asked that the state government be assessed solely on the strength of its finances and its future prospects, and not on the subjective and politically correct considerations that go into the ESG. .
“S&P’s ESG credit metrics politicize what should be a purely financial decision,” the Utahns write, highlighting how leftist regulators and ESG activists have tried to pressure banks not to work with “oil, gas, coal and firearms industries”. others.
The letter notes that S&P is supposed to analyze financials and profitability and that “the integration of this analysis with the political whims of the day is unacceptable. If [ESG indicators] are not political, but are financially significant, then they would be considered in traditional credit analysis. ESG indicators are therefore not necessary.”
And that’s just the beginning, because ESG ratings are even more subjective than they appear. There is no reason to believe that any particular person’s version of ESG is in fact “socially responsible”. For example, as the Utah letter notes, “Russian energy giants Gazprom and Rosneft outperformed US energy companies ExxonMobil and Chevron on S&P’s ESG scale.” These Russian companies are partly state owned and fully controlled by Vladimir Putin, his cronies and other war criminals who slaughter civilians in Ukraine. So why are they a more socially responsible investment than Exxon?
The truth is that ESG pressure is aimed at American companies because, unlike Russian or Chinese state-affiliated companies that have no intention of being socially responsible, Americans are expected to feel pressure to conform. Thus, ESG considerations do not contain objective information – rather they are motivational and rhetorical tools used to bully boards into advancing someone’s agenda. Whose? Well, maybe Putin’s, although that wasn’t the original intention.
States and corporations must stand up, as Utah did, against the corruption of finance that ESG represents. Politics is for pundits and elected officials, not the people who run your retirement savings. Left-wing fantasies about the world burning 10 years from now cannot be allowed to interfere with sound investment decisions that help individuals, families and businesses flourish.