Bank Failures Highlight Risks of Using ESG in Americans’ Pension Funds
President Joe Biden used his veto power on Monday to block a bipartisan action from Congress that would have prevented pension fund managers from investing retirees’ money according to environmental and social-justice criteria.
“There is extensive evidence showing that environmental, social, and governance factors can have a material impact on markets, industries, and businesses,” Biden stated.
However, despite attempts by its advocates to brand environmental, social, and governance (ESG) criteria as an effective risk-management tool, recent bank failures such as Silicon Valley Bank (SVB) suggest the opposite.
In defense of ESG, Senate Majority Leader Chuck Schumer (D-N.Y.) wrote in a Wall Street Journal op-ed that “America’s most successful asset managers and financial institutions have used ESG factors to minimize risk and maximize their clients’ returns. In fact, according to McKinsey, more than 90 percent of S&P 500 companies publish ESG reports today.”…