The beleaguered environmental, social, and governance (ESG) investment sector has taken a pummeling from all sides this year, most recently from a Republican-led offensive accusing $8 trillion asset manager BlackRock and other investment companies of hostility toward the oil and gas sector.
The problem with ESG as an investment approach is the lack of standardized criteria for what makes an investment sustainable. An ESG approach ostensibly yields guilt-free returns—for example, by excluding fossil fuel and defense investments, or prioritizing sectors like green energy. But in fact, it could really refer to any strategy that results in a fuzzily defined positive impact somewhere in the world.
