Dan Katz writes that overall bans on ESG won’t be effective policy:

As we parse out those definitions, the core public-policy challenge is to address ESG’s overbearing influence in our capital markets. This is caused not by mere consideration of ESG factors, but by excessive focus on ESG relative to other important risks like supply chain and energy security that have also traditionally been considered non-pecuniary. Rather than banning ESG flat out, policy-makers might consider how to restore proper balance to the consideration of all traditionally non-pecuniary factors, including ESG.
Publicly pronouncing that consideration of ESG factors should be ended or seeking to prohibit ESG under the dead end of restating existing fiduciary standards is not likely to achieve this end. Instead, states should instead seek to accelerate evolution of market practices by emphasizing that the proper exercise of fiduciary duties involves consideration of a broad range of potential factors that may have pecuniary impacts, recognizing that ESG factors are just a piece of the puzzle.

Read the whole thing here.