The ESG Con

It's patently obvious that you cannot rely on the main stream media or big tech to tell you the truth.

And despite the moralising done by many of our big corporates, there’s a fair bit to question about what they have to say too.

One of the most outrageous areas is in proving up their ‘green credentials’.

Occasionally, some environmental activist might creep to the top and become CEO but usually this green posturing is done solely to placate the eco-facists.

It works like this. We’ll tell the world how enviro-friendly our business/products/people are and the swivel eyed-loons in the environmental activist army will leave us alone.

That’s the theory, it is great until it comes to practice because the un-showered inner city protest movement don’t really care.

It turns our neither do most of the CEOs.

They just want to conform and keep their job, so they overstate their personal and corporate green credentials.

It’s known as greenwashing and it goes on everywhere.

In the fund management industry, the green sop is known as a ‘responsible’ investing and embraces investing only in companies that comply with ESG principles.

ESG stands for Environmental, Social and Governance.

Environmental criteria consider how a company performs as a steward of nature.

Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates.

Governance deals with a company’s leadership, executive pay and shareholder rights.

It all sounds so lovely, and so much money is flowing into the sector, that 89% of Australasian fund managers, investing nearly $3 trillion, are now engaged in ‘responsible’ investing.

Let’s unpick that for a moment.

Much of the money flowing into fund managers comes from the superannuation sector.

These big super funds, and none are bigger here than union-controlled industry super,  are usually run by a mob of PC woke evangelists. Investments become a means of helping ‘the cause’ so they insist no investments in crazy, dangerous industries that might milk cows or operate trucks or something equally horrendous.

So, if the fund manager wants a mandate from big super, they better tick the responsible lending box.

The only problem being that actually finding ways to invest this money that actually complies with ESG is darned difficult.

I mean how many companies can claim not to have a fossil fuel powered transport arm….or use that power hungry thing known as the internet. Let’s remember 80% of our power comes from coal and gas..

That’s why so many investment groups have been caught gilding the ESG lily.

Even industry super giant REST was sued by a disgruntled member for ‘failing to protect his savings against climate change risk”. In an out of court settlement, the fund agreed to “nine initiatives aimed at mitigating climate change financial risk.”

I can say with great confidence that it’s a load of baloney but it’s got all the big bosses running scared.

The Australian Securities and Investment Commission (ASIC) is reviewing the sector for the “misrepresentation of products which pose a threat to a fair and efficient financial system”.

This follows a revelation that overseas agencies are investigating industry giant Deutsche Bank for “misleading clients about the nature of its sustainable investment offerings.”

Like so many things in this world, the ESG apparition isn’t about saving the planet.

It’s all about the money.

But this money actually belongs to punters like you and me.

Some may like the idea of ESG investing but frankly I’m more interested in the return on my investments.

No corporate or superannuation board should be trading away their fiduciary responsibility of returns for their investors for E or S or G.

As a shareholder, their job is to act in our interests, not the interests of a bunch of trumped up and often hypocritical eco-activists claiming ‘financial protection from climate change’.