Today, the Detroit Free Press published an op-ed by Neil Hawkins and Laura Asiala, retired Dow business executives. In it, they argue that “in addition to financial information, ESG information is also critically important to make investment decisions.”
From the op-ed: “[ESG] matters because this kind of information is needed by investors to make thoughtful decisions about their money. In fact, to make decisions without applying consideration for these important issues skews capitalism, because it does not reflect the true potential risks, rewards and impact of investments.”
A majority of voters agree with Hawkins and Asiala that financial managers should be allowed to consider environmental factors when making investing decisions.
The op-ed continues: “Yet in 2023, lawmakers in 37 states introduced 165 pieces of legislation designed to prevent companies and investors from seeking and considering such important factors, like climate change, in making risk-adjusted investment decisions. This effort is commonly referred to as the ‘anti-ESG movement.’”
“We propose getting back to basics,” they write. “The availability of standard, timely, and reliable information underpins the effectiveness of capitalism and the stability and growth that it provides. That’s not new. What is new is the recognition that in addition to financial information, ESG information is also critically important to make investment decisions. Investors deserve to have that information.”
The proof is in the numbers. Attacks on responsible investing have devastating impacts in states across the country:
- The Kansas State Division of the Budget projected reduced returns of $3.6 billion over 10 years for the Kansas Public Retirement System if anti-ESG investment restrictions were adopted.
- The Arkansas Public Employees Retirement System estimated that they could lose $30 million to $40 million a year due to an anti-ESG bill that would require the state treasurer and public entities to divest assets from certain institutions that use metrics related to responsible investing.
- The Indiana Public Retirement System found that anti-ESG legislation “could result in reduced investment returns by $6.7 B over the next 10 years.
- According to the Chief Investment Officer, the Oklahoma Public Employees Retirement System could face $9.7 million in taxes, fees and commission costs if it is forced to divest from BlackRock, Wells Fargo, JP Morgan Chase, State Street Corp, and Bank of America because of anti-ESG legislation.
To read the full op-ed, click here.
