Nationalists Are Glomming on to ESG

At RealClear Energy is a column titled "When the New Right Meets the Old Left on ESG," by Rupert Darwall. It is notable for bringing up an interesting historical note and for warning about a possible trend.

First, the history:

Image by Viktor Talashuk, via Unsplash, license.

... BlackRock's conversion to climate activism and demanding that the companies it invests in should produce net-zero transition plans followed an intervention by the Sisters of Mercy, who had filed a motion ahead of BlackRock's 2020 annual meeting accusing it of neglecting climate issues in its stewardship program. Whatever the motives of the sisters, it is highly improbable that they included maximizing the value of BlackRock stock.

Hmmm. Nuns trying to shame a business into becoming a sacrificial lamb... Sounds familiar, doesn't it?

It's too bad BlackRock didn't have someone like T.J. Rodgers at its helm.

Second, the warning:

[Julius Krein, senior editor of the nationalist conservative journal American Affairs] argues that conservatives should drop their "silly pretence" in the efficacy of markets and promote a conservative version of ESG, incorporating "their own substantive goals" -- an implicit admission that ESG is indeed a vehicle for promoting a political agenda. This is asking conservatives to accept two counterintuitive propositions: first, that Congress and the administrative state have the potential to be more efficient capital allocators than markets; second, that conservatives can impose their cultural values and political preferences on Wall Street and blue-state pension funds such as CalPERS, CalSTRS, and the New York State Common Retirement Fund. [bold added]

I am not sure what distresses me more here -- the fact that "conservative ESG" is being mooted -- as if conservatives can't already run businesses and largely decide how to invest on whatever ideological basis they want; or that conservatives are so indifferent to the fact that government investing is inherently a swindle since the government has no money of its own; or the complete absence of the word rights even from the messenger, who clearly means well.

Darwall does mention certain (evidently incomplete or inconsistently enforced) legal safeguards of investor money in the next paragraph. And he does warn that the proposed move resembles the European "effort to socialize savings."

But only an explicit call for government to protect individual rights can help one see that (a) what the likes of California have already done has already in part "amount[ed] to nationalization by stealth," or that (b) the only ultimate way out of this mess is to begin in whatever small way possible to "privatize the investment sector."

-- CAV