Only when Larry Fink gives up his Gulfstream jet (he probably has more than one) and reduces his own carbon footprint by selling all but one of his homes, and starts taking the subway to the office, will I believe he gives a rat's ass about the environment and the other religious-cult things he's forcing on those for whom the company he heads is a fiduciary.
Larry still wants to be Treasury Secretary. Gary got what he always wanted SEC chair. It's the Peter Principle writ large. What else is money for if not to buy power in their febrile minds. As far as Larry and Blackrock is concerned, state treasurers and others like-minded with big pots of money will start taking it elsewhere and when it becomes achingly apparent that ESG investing underperforms - adios.
As far as Faber, we all know what the NBC in CNBC stands for and I'm still pretty sure they have picked a side.
Someone observed that if a company managing an index fund voter proxies for that fund, they are implicitly saying that while they're not smart enough to pick the best companies to invest in, they *are* smart enough to tell those companies how to run their own businesses.
And similarly...is a defense company (weapons manufacturer) an ESG stock or not? Unless one is an absolute pacifist (a pretty rare breed), it would seen socially *irresponsible* to not want American and allied forces armed with the best weapons.
Also noteworthy that a lot of people who have been hostile to American military spending and the the American military in general are now very-pro-Ukrainian military and American support of same...there are Americans flying the Ukrainian flag who would never have thought of flying an American flag.
One of the biggest ESG emerging market funds is Calvert (CVMIX). 27% of its holdings are in China.
Would love to know how they justify Chinese companies given a focus on "Social" or "Governance." (As they are tech firms, I'm giving the Alibabas and Tencents in CVMIX a mulligan under Environmental.)
ESG, to me, is effectively a charitable donation. Many people that are pushing this are in a wealth bracket where they are far beyond the need to accumulate additional wealth and now seek the same results one would associate with charitable organizations. There is a virtue signaling component to it, though I think many do believe they can have their cake and eat it too with this scheme. Many feel virtuous in that they will accept less return, but achieve that warm feeling they get at cocktail parties when they can humblebrag to their friends about their latest fad. As long as the return is not *too low,* right?
So I say, let them donate. What's the worst that can happen? If some of these companies succeed in developing "good" business models that create environmentally successful innovations, then that's a societal good. If they don't and they fail, it's not our money. We have the chance at a societal good without us being compelled to do it via, say, our taxes (I know, this isn't 100% true, but I don't have control over government with or without ESG).
I understand the point about subsidies, and agree. But if we can get more "ESG" virtue signalers to donate, then perhaps less of my tax money will be needed for these things.
The other opportunity is that there will be less capital chasing the investments I want to invest in. That means my dollars will receive a higher ultimate return, because capital is more scarce for these companies, thus driving up the cost of it. That benefits existing capital holders, along with up and coming wealth accumulators (working people).
The only downside that I can see is if when government pensions buy into this, lose their ass, and then the politicians turn to me and my business for more money to pay for their failed strategies. The only way to stop that is to lower pension benefits or just not fund them (Illinois). Then one day the unions and the state will square off. At least I can move to another place if that battle is lost (Illinois is losing).
I think we have entered an age where wealth is so abundant that people can freely squander it on frothy schemes like this and not really care all that much. It will take some severe wealth destruction to get back to the mentality of the Greatest Generation and those who survived ages of scarce resources. I remember my mom telling me that her and her four siblings would share the same bathtub of water and soap. Not the same tub -- the same water, starting with the oldest and going down to the youngest. And then they'd dump the water.
How far we've come. But I have a feeling we will someday be back to resource scarcity if our "elites" keep up their ways.
You write: "I have never ever seen a “green” company that cannot be profitable without government subsidies." Did you mean you've never seen a company that CAN be profitable without them?
THE TELL IN THIS INTERVIEW IS FABER'S STATEMENT "Fund managers want the best return for their shareholders"---->the "return" doesn't factor into an ESG managers calculus. Additionally, Faber brings up Tesla ($TSLA), and never mentions the entire basket of ESG stocks that are total losers.
You say, "it comes from a good place of intent". I disagree. This entire movement along with all of leftism and I mean ALL of LEFTISM is an effort to overturn reality. To reorder the world according to Man's desires rather than follow the ordered world of God, the Divine Creator. IMO, this sort of thinking is dangerous and will lead inevitably to evil outcomes.
In Genesis, God gave dominion over the earth to Man. The ESG movement (and leftism) is a rebellion against God's intent for man to take dominion over his creation.
It is a HUGE foolish conceit to think that we mere mortals can ruin or upend God's creation. Go read the last three chapters of Job if you wish to understand how small and insignificant we are in the grand scheme of things. (Or for that matter, watch a video of the first astronauts awe inspiring and humbling view of the earth from outer space or go for a drive out in flyover country, we are indeed small and insignificant)
And yet, AND YET, it was that same Judeo-Christian God of the Bible that was the first to teach that individual human being have infinite value.
Are there any ESG funds that are investing significantly in nuclear power? They could invest right now in NuScale, the only current pure-play US nuclear company...and after the GE split-up is complete, they can invest in GE Power (or the weird new name by which it will now be known), which owns 60% of the GE-Hitachi nuclear joint venture. I bet for a significant investment, they could even invest directly in the GEH venture.
Only when Larry Fink gives up his Gulfstream jet (he probably has more than one) and reduces his own carbon footprint by selling all but one of his homes, and starts taking the subway to the office, will I believe he gives a rat's ass about the environment and the other religious-cult things he's forcing on those for whom the company he heads is a fiduciary.
Larry still wants to be Treasury Secretary. Gary got what he always wanted SEC chair. It's the Peter Principle writ large. What else is money for if not to buy power in their febrile minds. As far as Larry and Blackrock is concerned, state treasurers and others like-minded with big pots of money will start taking it elsewhere and when it becomes achingly apparent that ESG investing underperforms - adios.
As far as Faber, we all know what the NBC in CNBC stands for and I'm still pretty sure they have picked a side.
ESG = Environmental, social, governance, no?
Someone observed that if a company managing an index fund voter proxies for that fund, they are implicitly saying that while they're not smart enough to pick the best companies to invest in, they *are* smart enough to tell those companies how to run their own businesses.
"Is an oil company an ESG stock or not?"
And similarly...is a defense company (weapons manufacturer) an ESG stock or not? Unless one is an absolute pacifist (a pretty rare breed), it would seen socially *irresponsible* to not want American and allied forces armed with the best weapons.
Also noteworthy that a lot of people who have been hostile to American military spending and the the American military in general are now very-pro-Ukrainian military and American support of same...there are Americans flying the Ukrainian flag who would never have thought of flying an American flag.
Psychologically interesting, I think.
One of the biggest ESG emerging market funds is Calvert (CVMIX). 27% of its holdings are in China.
Would love to know how they justify Chinese companies given a focus on "Social" or "Governance." (As they are tech firms, I'm giving the Alibabas and Tencents in CVMIX a mulligan under Environmental.)
The roots of ESG, from Vivek Ramaswamy.
https://pjmedia.com/news-and-politics/lincolnbrown/2022/10/10/vivek-ramaswamy-traces-the-roots-of-esg-its-been-going-on-a-lot-longer-than-we-knew-n1635890
ESG, to me, is effectively a charitable donation. Many people that are pushing this are in a wealth bracket where they are far beyond the need to accumulate additional wealth and now seek the same results one would associate with charitable organizations. There is a virtue signaling component to it, though I think many do believe they can have their cake and eat it too with this scheme. Many feel virtuous in that they will accept less return, but achieve that warm feeling they get at cocktail parties when they can humblebrag to their friends about their latest fad. As long as the return is not *too low,* right?
So I say, let them donate. What's the worst that can happen? If some of these companies succeed in developing "good" business models that create environmentally successful innovations, then that's a societal good. If they don't and they fail, it's not our money. We have the chance at a societal good without us being compelled to do it via, say, our taxes (I know, this isn't 100% true, but I don't have control over government with or without ESG).
I understand the point about subsidies, and agree. But if we can get more "ESG" virtue signalers to donate, then perhaps less of my tax money will be needed for these things.
The other opportunity is that there will be less capital chasing the investments I want to invest in. That means my dollars will receive a higher ultimate return, because capital is more scarce for these companies, thus driving up the cost of it. That benefits existing capital holders, along with up and coming wealth accumulators (working people).
The only downside that I can see is if when government pensions buy into this, lose their ass, and then the politicians turn to me and my business for more money to pay for their failed strategies. The only way to stop that is to lower pension benefits or just not fund them (Illinois). Then one day the unions and the state will square off. At least I can move to another place if that battle is lost (Illinois is losing).
I think we have entered an age where wealth is so abundant that people can freely squander it on frothy schemes like this and not really care all that much. It will take some severe wealth destruction to get back to the mentality of the Greatest Generation and those who survived ages of scarce resources. I remember my mom telling me that her and her four siblings would share the same bathtub of water and soap. Not the same tub -- the same water, starting with the oldest and going down to the youngest. And then they'd dump the water.
How far we've come. But I have a feeling we will someday be back to resource scarcity if our "elites" keep up their ways.
You write: "I have never ever seen a “green” company that cannot be profitable without government subsidies." Did you mean you've never seen a company that CAN be profitable without them?
ESG - environmental, social, governance - is pure baloney and has no place being in the investment arena. It is purely subjective and silly.
JLM
www.themusingsofthebigredcar.com
THE TELL IN THIS INTERVIEW IS FABER'S STATEMENT "Fund managers want the best return for their shareholders"---->the "return" doesn't factor into an ESG managers calculus. Additionally, Faber brings up Tesla ($TSLA), and never mentions the entire basket of ESG stocks that are total losers.
You say, "it comes from a good place of intent". I disagree. This entire movement along with all of leftism and I mean ALL of LEFTISM is an effort to overturn reality. To reorder the world according to Man's desires rather than follow the ordered world of God, the Divine Creator. IMO, this sort of thinking is dangerous and will lead inevitably to evil outcomes.
In Genesis, God gave dominion over the earth to Man. The ESG movement (and leftism) is a rebellion against God's intent for man to take dominion over his creation.
It is a HUGE foolish conceit to think that we mere mortals can ruin or upend God's creation. Go read the last three chapters of Job if you wish to understand how small and insignificant we are in the grand scheme of things. (Or for that matter, watch a video of the first astronauts awe inspiring and humbling view of the earth from outer space or go for a drive out in flyover country, we are indeed small and insignificant)
And yet, AND YET, it was that same Judeo-Christian God of the Bible that was the first to teach that individual human being have infinite value.
Quite the juxtaposition and irony.
Are there any ESG funds that are investing significantly in nuclear power? They could invest right now in NuScale, the only current pure-play US nuclear company...and after the GE split-up is complete, they can invest in GE Power (or the weird new name by which it will now be known), which owns 60% of the GE-Hitachi nuclear joint venture. I bet for a significant investment, they could even invest directly in the GEH venture.
ESG is just a left wing fetish….