“At the retail level, the culture wars have taken a particularly silly turn as conservatives celebrate Anheuser-Busch’s falling stock prices following a widespread boycott of Bud Light after it partnered with a transgender social-media influencer to promote the beer. The Mexican beer Modelo has soared into the top spot in U.S. beer sales as a result.
But who is going to break the news to the culture warriors? Modelo’s parent company, Constellation Brands, boasts that its “diversity, equity, and inclusion (DEI) goals…are critical components to our future success.” Trying to one-up always-agitated left-wing social-justice warriors, right-wingers also are angry about Target’s LGBQT displays—and have turned on religiously conservative Chik-Fil-A after learning it has a DEI officer.”
…
“As TechTarget explains, ESG is a “framework used to assess an organization’s business practices and performance on various sustainability and ethical issues” and “provides a way to measure business risks and opportunities.” It’s a way for corporations to evaluate their policies. Are they investing in things that help the environment, instituting fair employment policies, and embracing corporate transparency?”
…
“At the political level, however, ESG—and the reaction against it—has become a means for elected officials to use their respective governments’ massive financial clout to achieve desired cultural aims. That’s where this latest cultural battlefront is becoming dangerous. In blue states, such as California, elected officials are pushing pension funds to divest from their holdings in fossil fuels, firearms manufacturers, and tobacco companies.
They’re also directing vast government investments into companies that match their political aims (alternative energy, recycling, etc.) but might not yield the best bang for the buck. The California Public Employees’ Retirement System (CalPERS) has a whopping $440-billion in assets, so the temptation is strong to starve capital from “bad” industries and energize “good” ones.
This has triggered a backlash in Red states, which have passed laws that forbid state business with investment firms that divest in the ways that Democratic states prefer. Texas has taken that approach and, according to one study, could cost the state billions of dollars in higher borrowing costs. Both sides are putting cultural preferences above their fiduciary responsibilities.”
…
“The answer is to call a truce. States should enact “clear fiduciary duty laws that define who is responsible for state investment” and allow them to use ESG factors only if they promise to yield better financial results”
…
“The obvious and important goal is “to insulate pension funds, other investments and public contracts…from political concerns.” Of course, trying to convince politicians to limit their political influence in financial decisions is no easy feat, but there’s too much financial risk to let these bitter cultural battles spread from the grocery-store shelves to Wall Street.”