Essay by Eric Worrall
h/t Dr. Willie Soon; Authors David Blood and Al Gore, writing in WSG as guests, were surprised that some companies and politicians were resisting their push for climate and development disclosures sustainable development. But there is a hidden spot in their impulse.
ESG investment in accordance with fiduciary obligations
It is not an end by itself. It is simply an analytical tool that investors would be smart to use.
By Al Gore and David Blood
November 8, 2022 630pm ETRegardless of your investment strategy, timely access to accurate and comprehensive information is important. Transparency allows investors to make informed decisions with a deeper understanding of the risks and opportunities a company faces. However, some US politicians are now trying to pass legislation to prevent investors from considering highly relevant information.
Why? Is the information they seek to ban inconvenient?
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Let’s consider two examples. If a company is at risk of incurring significant debts due to past dumping of hazardous chemicals in rivers, shouldn’t investors need to know that? Or how about If a company is building gas-fired power plants or new oil pipelines, as governments tighten their climate targets, it could have to close decades before their shelf life. their expected expiration date. Isn’t that relevant information?
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What is that catch me referring to? The point is that Al Gore’s push is political. Those climate goals have yet to be tightened and may never be tightened – but requiring companies to include ESG considerations in their financial decisions would force them to behave as if tightening of climate regulations had already occurred..
There is nothing inevitable about the changes that Al Gore claims will happen in the future.
Worse still, the pressure on companies to consider climate goals can actually put corporate finances in jeopardy. For example, in June, Green Party German Deputy Chancellor Robert Habeck announces Germany will restart its coal plantsdue to their desperate energy shortage – caused by forcing companies to behave as if the green energy revolution was inevitable.
The same could happen to the United States, if Al Gore and his friends find their way.
I have no problem with companies voluntarily publishing climate information or inviting an audit from Santa and the tooth fairy if they think it will improve their business prospects. But the financial disclosures still have to focus on the present and here, not on Al Gore’s fantasies of what might happen in the future – otherwise the US national economy could end. like shipwrecks in Europe.
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