ESG, RIP?

John Stossel reports that, after enough large companies lost their shirts, many are scaling back on the leftist ESG (Environmental, Social, and Governance) fad. He cites numerous example of businesses losing focus on their purpose -- making money by offering value -- and losing money, oddly enough:

Modified from image by John Thomas, via Unsplash, license.

America needs high-performance computer chips. Intel was once the leading manufacturer of such chips. But now, even as Congress gives Intel billions in taxpayer handouts, the company is cutting thousands of jobs.

Why? While Intel's competitors innovated, Intel obsessed about "sustainability."

Intel's website lists endless ESG goals like "environmental, health, wellness, and safety programs to care for people and the planet." It even brags about "green software," whatever that is.

That's a lot of energy spent not making the best chip...

While many correctly predicted that ESG would lose its momentum once its unprofitability became evident, the above quote contains data that should alarm us: Intel is wrongly being subsidized in the name of "industrial policy," with bipartisan support.

This is bad for two reasons.

First, any company favored in any way by a government is, to the degree of that special treatment, rendered numb to market forces, such as the need to earn money through high quality.

Second, ESG, and past programs like it, were improperly encouraged by the government, such as through the investment strategies of state pension funds and regulatory guidance contrary to the commonsense idea that a fund manager has a fiduciary duty to invest for high returns -- rather than using your money without your consent to finance political schemes you may or may not agree with.

The government has no business dictating (or "encouraging") investment behavior of any kind, and the fact that nobody bats an eye at this (or other ways it meddles with trade) practically guarantees that some other consideration than profit will pollute the investment landscape in a matter of time.

This can be in the form of yet another reincarnation of ESG under a leftist administration or pressure to conform to some sort of right-wing ideological agenda, rather than simply being left alone.

I'm happy to bury ESG, but fully expect it to return like the zombie that it is, until our society's culture changes for the better, to embrace freedom once again.

-- CAV