Financial institutions

The hypocrisy of American financial institutions vis-à-vis China

One of the latest trends on the left is the “environmental, social and governance” or ESG movement, in which big business and financial institutions promise to be environmentally friendly, diverse, inclusive and otherwise, while remaining focused on money. In reality, ESG, especially from the investor side, looks more like window dressing and an exercise in mass hypocrisy than anything else.

Unsurprisingly, those who are likely to make money from the ESG ecosystem – rating firms, corporate lawyers, audit firms, investment banks, asset managers, proxy advisors, providers of clues, etc. – want the federal government to create and impose ESG standards for everyone. businesses.

While ESG advocates generally talk about the importance of climate and social issues, they ignore the reality underlying their rhetoric.

This horrifying reality includes the fact that American financial institutions – most of which have pledged to uphold the principles of the ESG craze – enable Communist China’s genocidal slavery regime.

In direct contradiction to their own climate promises, they are funding the construction of new coal-fired power plants in communist China. They help the communist regime in China dredge the South China Sea. They finance factories that use slaves. They fund human surveillance systems in slave camps.

How credible is the virtue of Wall Street when it continues to send money from American investors to a Chinese Communist Party committed to slavery, genocide and international aggression?

ESG also apparently fails on investment performance. Evidence indicates that several ESG funds are really just overvalued index funds, that ESG strategies fail to generate increased returns for investors, and that some of the better known ESG investments have woefully underperformed ESG funds. traditional investment.

ESG investing has produced below-average returns, forced boards to discuss political issues rather than core business considerations, and increased the practice of “greenwashing,” which occurs when ESG marketing gimmicks are used to sell expensive “green” or “socially responsible” investors funds that don’t live up to their label.

Undeterred by their failures to uphold basic human rights or do their day-to-day investment work, ESG advocates want the Securities and Exchange Commission to create investment rules that focus on political and social issues. The SEC’s mission is to protect investors who put their capital at risk, to facilitate small business access to our capital markets, and to maintain market integrity, not to tax investments in industries or politically favored companies.

As SEC Commissioner Hester Peirce recently and correctly noted, “Congress has not authorized the SEC to address ESG matters for the purpose of promoting objectives unrelated to federal securities laws.” .

Why the feds should favor the policy preferences of anyone on Wall Street — especially ESG child prodigies who have proven themselves without a moral compass — over the personal preferences of millions of Main Street investors who are simply looking for a decent return on their investments to help fund retirement, a child’s college education, or other savings?

There are braggarts in the United States (looking at you, climate envoy John Kerry) who are willing to turn a blind eye to the communist regime’s depredations in China. They gleefully claim that climate change is an existential threat to the world, usually right before they board their private jets and head to one of their beach houses.

But the real existential threat to the United States is that the communist regime in China is determined to rule the world. In this effort, they are aided (knowingly or unknowingly) by compromised Americans in finance (like Ray Dalio and Larry Fink), in entertainment (think John Cena and LeBron James), and by compromised corporate America (Disney, Apple , You’re here).

The federal government should not help bad actors in the financial world exacerbate the existential threat we face by legitimizing ESG propaganda, harming American investors, and enriching the genocidal regime in China.

• Washington Times columnist Michael McKenna is co-host of “The Unregulated” podcast. He was most recently Deputy Assistant to the President and Deputy Director of the Office of Legislative Affairs at the White House.