Ep. 321 Complex Challenge: ESG in the Political Arena

There is currently political polarization in the United States regarding Sustainable Investing and the environmental, social, and governance metrics, also well-known as ESG.

Environmental, Social, and Governance (ESG) factors have increasingly become a focal point in the political landscape. The integration of ESG factors into business and investment decisions has been driven by regulatory changes, particularly in the European Union, and is supported by many institutional investors.

However, this has also sparked a backlash, particularly in the United States, where conservative politicians and investors have criticized the ESG movement as being overly politicized and not always in the best interest of shareholders.

Despite the controversy, there is a growing recognition of the need to distinguish between values-based and value-based investing. The latter focuses on financially material ESG issues that can impact financial performance.

My guest for this episode is Urban Larson, a Sustainable Finance Advisor at White Pine Advisory and a Professor of Sustainable Investing at Duke University.

We discuss why ESG factors are polarized in the United States these days.

  • Why has ESG become politicized?
  • Which of the three ESG metrics is the most politicized?
  • How can the November elections’ results affect this progress?
  • Is the ESG reaction fierce and well-organized?

Also, we talk about the critical aspects of his interesting article: “ESG Backlash: Why Politicians Attack Sustainable Investing?” 

Contact with Urban Larson on LinkedIn.