David Bahnsen hosts podcast with Aswath Damodara (2022)
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On July 28, wealth manager David Bahnsen – who is also a trustee of the National Review Institute – hosted Aswath Damodaran on his National Review-produced podcast, the Capital Record. Damodaran is a professor of finance at NYU’s Stern School of Business and has, in the past, expressed skepticism about ESG and its impact.
In an accompanying article published at National Review Online, Bahnsen wrote about “A few points I find worth highlighting for those interested in a deeper dive on the subject,” including:
“The claim that ESG comes at 'no cost' — that investing in a way that meets these environmental, social, and governance tests involves no trade-offs — ought to ring some alarm bells. Basic laws of economics tell us that there is no such thing as a free lunch. As Damodaran puts it, 'constrained optima cannot beat unconstrained optima' (this should be so elementary to any first-year business student, it hurts). It would be one thing if ESG zealots were claiming that although we have to accept lower returns or more difficult business conditions, it is worth it in exchange for the alleged environmental, social, and governance benefits that investing subject to ESG constraints will provide. But alas, that’s not what most of them have been saying. Instead, they claimed they would make the world a better, more 'sustainable' place by forcing restrictions on others, and that no sacrifice would be involved. These intelligence-insulting claims are a great place to start one’s critique….”
And:
“Fundamentally, and I cannot say this emphatically enough, ESG is a pharisaical way for people to feel virtuous and good without having to do anything at all. The lack of individual sacrifice being made by those who push so hard for ESG is damning. The sacrifices that are being made are being made by the shareholders in the companies (or the underlying shareholders in the funds that invest in those companies), now expected to measure up to ESG’s standards. Virtue is not something exhibited at no cost to the individual; agency, sacrifice, and cost are part of character and justice. The ESG movement has put the cost on other actors, abusively so, and feigned progress and moral superiority.”
See also
- Environmental, social, and corporate governance (ESG)
- Economy and Society: Ballotpedia's ESG newsletter
External links
Footnotes
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