Essay by Eric Worrall
h/t Dr. Willie Soon; Authors David Blood and Al Gore, writing in the WSG as guests, are astonished some companies and politicians are resisting their push for climate and sustainable development disclosures. But there is a hidden catch in their push.
ESG Investing Is Consistent With Fiduciary Duty
It’s not an end in itself. It’s simply an analytical tool that investors would be smart to make use of.
By Al Gore and David Blood
Nov. 8, 2022 630 pm ET
No matter your investment strategy, timely access to accurate and comprehensive information is critical. Transparency enables investors to make informed decisions with a greater understanding of the risks and opportunities facing a company. Yet incredibly, some American politicians are now trying to pass laws to prevent investors from taking highly relevant information into account.
Why? Is the information they seek to ban inconvenient?
Consider two examples. If a company is at risk of having significant liabilities for its past practice of dumping toxic chemicals into a river, don’t investors need to know that? Or how about if a company is building gas-fired power plants or new oil pipelines that, as governments tighten their climate targets, may have to be shut down decades before their projected useful lifetimes expire. Isn’t that relevant information?
What is that catch I mentioned? The problem is Al Gore’s push is political. Those climate targets haven’t been tightened yet, and might never be tightened – but requiring companies to include ESG considerations in their financial decisions would force them to behave as if that tightening of climate regulations had already occurred.
There is nothing inevitable about the changes Al Gore claims will occur in the future.
Worse, pressure for companies to consider climate goals could actually put corporate finances in jeopardy. For example, back in June, Green Party German Vice Chancellor Robert Habeck announced Germany would be restarting their coal plants, due to their desperate energy shortages – caused by forcing companies to behave as if the green energy revolution was inevitable.
The same thing could happen to the USA, if Al Gore and his friends get their way.
I have no problem with companies publishing climate information voluntarily, or inviting an audit from Santa Claus and the tooth fairy if they think that will improve their business prospects. But financial disclosures must remain focussed on the here and now, not on Al Gore’s fantasies about what might happen in the future – otherwise the US national economy could end up like train wreck Europe.
via Watts Up With That?
November 10, 2022 at 04:21AM