Another deep dive into the perils of ESG. This is based on Vivek Ramaswamy's latest book, Capitalist Punishment: How Wall Street Is Using Your Money to Create a Country You Didn't Vote For. Ed and Ron will provide the main points from this critical look at ESG. If you've wondered how FTX can achieve a higher score on its "G" (Governance) than did Exxon-Mobil, you won't want to miss this show.
Use these show notes to follow along with the audio.
Segment one:
Have you read Capitalist Punishment yet by Vivek Ramaswamy yet? One of the things Ron and Ed loved about the book is that Vivek backs it up with evidence and examples from multiple sources. https://www.amazon.com/Capitalist-Punishment-Street-Create-Country/dp/0063337754
Greenwashing is fraudulent. The SEC has sued several investment firms for greenwashing. Green SMUGGLING occurs when a non-ESG fund smuggles ESG policies into their investment practices.
The levels of complexity in the book Capitalist Punishment make talking about the topic difficult. It’s not 2D or 3-dimensional but rather a series of tentacles that provide for an intense level of complexity. However, it is NOT conspiracy theory
“ESG is the traffic cop that writes tickets to enforce stakeholder capitalism” —Vivek Ramaswamy https://www.amazon.com/Capitalist-Punishment-Street-Create-Country/dp/0063337754
Both CSR and SRI make no pretenses about maximizing returns but ESG does. ESG claims a higher level of return while solving all of the world’s injustices.
Segment two:
“Bogle Sounds a Warning on Index Funds” https://12ft.io/proxy?q=https%3A%2F%2Fwww.wsj.com%2Farticles%2Fbogle-sounds-a-warning-on-index-funds-1543504551
Green Smuggling has a fancy acronym to make it sound better, IFSI, or “investing for sustainability impact”
“One way to steal people is to distract them from what you are doing. A safer way is to bore them.” —Vivek Ramaswamy https://www.amazon.com/Capitalist-Punishment-Street-Create-Country/dp/0063337754
ESG means different things in different countries. Ron and Ed cited a few examples from Vivek Ramaswamy’s book, Capitalist Punishment, on the show today. https://www.amazon.com/Capitalist-Punishment-Street-Create-Country/dp/0063337754
Public employee pensions is another example of Green Smuggling. In Capitalist Punishment, Vivek Ramaswamy argues that CalPERS has forgotten that their trustees say they must act solely and exclusively to maximize retiree’s returns.
Segment three:
We are going to be live at Scaling New Heights in two weeks. If you will be there, check us out on the main stage! #SNH23
In China, the E stands for “E”nergy supply, S is all about the “S”uggestion, and G is the most fun. In the US, good “G”overnance means not being owned by a single, autocratic dictator. (Are we banned in China yet?)
Regarding ESG, “This is politics. It belongs in the political realm. It doesn’t belong in the C-suite. Nobody elected Larry Fink.” —Ron Baker
What we commonly hear is, “When the accountants get ahold of ESG they will be able to put standards in place.” Ron and Ed would like to know, “Based on what?” It’s a genuine question to the community.
Sam Bankman-Fried was able to get FTX a higher ESG score than Exxon-Mobil.
Segment four:
Great background on ESG from the show today. What can you do? Start asking questions of your money managers and investment funds.
Based on the book Capitalist Punishment by Vivek Ramaswamy, funds are pouring out of ESG. The trend is shifting based on investment activity. https://www.amazon.com/Capitalist-Punishment-Street-Create-Country/dp/0063337754
“At least with David Copperfield making the Statue of Liberty disappear, he is entertaining me. [The ESG Illusion] is not entertaining me.” —Ron Baker
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