Russ Greene of Stand Together writes about how ESG functions as a tax:
We can only truly understand ESG, therefore, if we look at the bigger picture. And there we see that ESG functions as “an effective carbon tax on the consumers in places like the United States and Europe” whose revenue ends up “going to places like Russia.” That’s according to Goldman Sachs’ top commodity strategist, Jeff Currie.
Let’s unpack Currie’s two points. The first point is that ESG functions as a de facto tax on politically unfavorable sectors: not just oil and gas, but mining, steel, shipping, and more. ESG raises the cost of capital for these politically unfriendly sectors by an estimated 15 percentage points. This means it’s harder for people working in the “old economy” to access loans and investment. For example, a dairy farmer may have a harder time getting a loan due to happening to work in an ESG-unfavorable industry.
The second point is that the ESG “tax” is paid by Western citizens to foreign nations such as Russia. While the narrative around ESG spread by Michael Bloomberg and others holds that it’s simply “investing 101,” that’s hard to square with what Larry Fink has stated: that public companies’ decreased investment in oil and gas has created “the biggest capital market arbitrage.” When ESG pressures decrease public-company investment in politically unfavored opportunities, the opportunities don’t disappear. Instead, they’re largely captured by other actors less committed to ESG.
David Bahnsen talks to Sheila Weinberg of Truth in Accounting about government accountability. Listen here, or wherever you get your podcasts.