In one essay – It’s Time to Move on from ESG – resident scholar Steven Globerman says that the ESG movement fails to deliver on its promises.
“Investor support for ESG is starting to wane, which isn’t surprising as the considerable harms ESG mandates pose come to light,” he said.
Globerman says that ESG-branded investment funds do not perform better than conventional investment funds, companies that proclaim to pursue ESG-related activities are not more profitable than companies that do not, and mandating ESG-related corporate disclosures imposes additional costs on public companies and diverts resources away from productivity-enhancing investments, harming workers.
His essays states that the claim that ESG initiatives enhance corporate profitability is not consistently supported by academic research and that the push for mandatory ESG disclosures is seen as costly and potentially discouraging companies from going public.
It also says that the focus on ESG may undermine the efficiency and wealth-creating potential of the private sector and suggests that competitive market forces and consumer behavior are more effective in addressing environmental and social concerns than top-down ESG mandates.