Jump to content

ESG Takes A Hit


Recommended Posts

The thing about ESG is it's not a money making enterprise.

Don't misunderstand me. There are companies on the ESG checklist that are making out like bandits. (Mostly because that's what they are - bandits) But ultimately that's government and union money. Sooner or later the bubble has to burst. 

Link to comment
Share on other sites

9 hours ago, Infidel Dog said:

OK, I'll just keep saying it until you hear me then. The trump rule disallowed ideological based investments over profit.

Then the Biden regime came in with what you're calling the labor department rule. It allowed ideology based investments over profit prioritized ones.

But, and I've said this at least 3 times now there are ways to either drip, drip, drip new government restrictions in or to allow an inevitable ESG monopoly to take over so there is no other place to go.

And on the way there the working guys whose pension managers are on board with the globalist ideology over profit approach are screwed. Their only choice is to wait and see what's going to happen with their money.

And the key word, once again, is "allow."

Which is in no way the same as "force." 

So stop spreading lies.

Link to comment
Share on other sites

2 hours ago, Nationalist said:

If I'm not mistaken, the US government is the biggest employer in the nation. If you work for the government, you have a pension plan that's returning a sub-standard return.

Can government employees chose the pension plan they want to invest in?

There's nothing specific to pensions. If fund managers see value in ESG they'll consider it when composing their funds. If they don't, they won't. 

In no way, shape or form is that being forced. 

The Trump administration decided to restrict this free market choice in 2020. All the DoL change does is restore this option to the market.

And no, people under pension plans have little or no control over how the plans are managed. This doesn't change that. 

Link to comment
Share on other sites

8 hours ago, Hodad said:

There's nothing specific to pensions. If fund managers see value in ESG they'll consider it when composing their funds. If they don't, they won't. 

In no way, shape or form is that being forced. 

The Trump administration decided to restrict this free market choice in 2020. All the DoL change does is restore this option to the market.

And no, people under pension plans have little or no control over how the plans are managed. This doesn't change that. 

Amazing that you can rant away, then close with the very point that makes this forcing people into it.

Link to comment
Share on other sites

3 hours ago, Nationalist said:

Amazing that you can rant away, then close with the very point that makes this forcing people into it.

Ah, no. Your claim was that Biden was forcing ESG investment. That's complete bullshit. 

Fund managers buy what they buy. They are allowed to consider ESG as a facet of their decision making. They might buy petroleum. They might buy tech stocks. They might buy agriculture. The fund participants don't get to choose. 

If you want to say that Biden is "forcing" people to invest in ESG companies, then by the same function you'd have to say he's forcing people to buy petroleum and tech and agriculture. In fact, you'd have to agree that absolutely any factor that fund managers might consider or any feature of a company in the portfolio is actually a case of Biden "forcing" people to buy that factor or feature.

Which is an indefensibly stupid position. You really want to claim it?

 

Edited by Hodad
Link to comment
Share on other sites

8 hours ago, Hodad said:

Ah, no. Your claim was that Biden was forcing ESG investment. That's complete bullshit. 

Fund managers buy what they buy. They are allowed to consider ESG as a facet of their decision making. They might buy petroleum. They might buy tech stocks. They might buy agriculture. The fund participants don't get to choose. 

If you want to say that Biden is "forcing" people to invest in ESG companies, then by the same function you'd have to say he's forcing people to buy petroleum and tech and agriculture. In fact, you'd have to agree that absolutely any factor that fund managers might consider or any feature of a company in the portfolio is actually a case of Biden "forcing" people to buy that factor or feature.

Which is an indefensibly stupid position. You really want to claim it?

 

Ya...right...

You tell that to the people losing investment in their futures. I'm sure they'll feel better.

Link to comment
Share on other sites

1 hour ago, Nationalist said:

Ya...right...

You tell that to the people losing investment in their futures. I'm sure they'll feel better.

Okay. 

Hypothetical people of future America, let it be known that President Joe Biden has not, at any time, dictated the company mix in your investment portfolios, nor the process by which fund managers evaluate and project value.

Job done! In case people were REALLY farking confused about the role of the POTUS in investment funds that should set them straight. Nice of you to look out for those folks. ?

Link to comment
Share on other sites

1 minute ago, Hodad said:

Okay. 

Hypothetical people of future America, let it be known that President Joe Biden has not, at any time, dictated the company mix in your investment portfolios, nor the process by which fund managers evaluate and project value.

Job done! In case people were REALLY farking confused about the role of the POTUS in investment funds that should set them straight. Nice of you to look out for those folks. ?

Indeed.

Also nice of the 2 houses of congress to put an end to Joe's stupidity.

Have a nice day...

Link to comment
Share on other sites

6 minutes ago, Nationalist said:

Indeed.

Also nice of the 2 houses of congress to put an end to Joe's stupidity.

Have a nice day...

Except that didn't happen. It's not signed and will be vetoed. 

And indeed we live in a very strange world when would-be conservatives deride the notion of free market economics simply to spite a Democratic president. They say, "Free market economics are the one true answer, unless the market values something differently than I do, then we shouldn't allow that choice!"

Link to comment
Share on other sites

4 minutes ago, Hodad said:

Except that didn't happen. It's not signed and will be vetoed. 

And indeed we live in a very strange world when would-be conservatives deride the notion of free market economics simply to spite a Democratic president. They say, "Free market economics are the one true answer, unless the market values something differently than I do, then we shouldn't allow that choice!"

Sure.

Tell it to these fine Democrats...

  • Senator Jon Tester of Montana
  • Senator Joe Manchin of West Virginia
  • Representative Jared Golden of Maine
Link to comment
Share on other sites

13 hours ago, Nationalist said:

Amazing that you can rant away, then close with the very point that makes this forcing people into it.

Nobody's forcing anyone.  Nobody gets to pick what their pension plans are investing in, so railing about ESGs and complaining you're "forced" into that is no different than some hippie protesting that CPP invests in railways/pipelines crossing native lands.  Get over it, buttercup. 

The reason ESG has become popular is because they represent measurable risks to a portfolio, which is critical for a pension plan.  Because a pension plan has very clear and very predictable cash flow needs, investing in short-sighted companies that only care about this year or next year's stock performance is a terrible bet.  The companies planning for success 10+ years out are much, much more attractive by and large.  Companies like, say, SNC Lavalin or Rio Tinto would score poorly on an ESG framework and be avoided.  

Regardless, the ESG framework is just a way of thinking.  Republicans can beat the drums of the culture war and "ban" it, but that won't change anything outside of the US and it won't even change how companies like Blackrock etc invest.  The only thing that this changes is that companies promoting ESG will have to update their marketing material and terminology.  It's a waste of everyone's time.  

  • Thanks 1
Link to comment
Share on other sites

29 minutes ago, Moonbox said:

Nobody's forcing anyone.  Nobody gets to pick what their pension plans are investing in, so railing about ESGs and complaining you're "forced" into that is no different than some hippie protesting that CPP invests in railways/pipelines crossing native lands.  Get over it, buttercup. 

The reason ESG has become popular is because they represent measurable risks to a portfolio, which is critical for a pension plan.  Because a pension plan has very clear and very predictable cash flow needs, investing in short-sighted companies that only care about this year or next year's stock performance is a terrible bet.  The companies planning for success 10+ years out are much, much more attractive by and large.  Companies like, say, SNC Lavalin or Rio Tinto would score poorly on an ESG framework and be avoided.  

Regardless, the ESG framework is just a way of thinking.  Republicans can beat the drums of the culture war and "ban" it, but that won't change anything outside of the US and it won't even change how companies like Blackrock etc invest.  The only thing that this changes is that companies promoting ESG will have to update their marketing material and terminology.  It's a waste of everyone's time.  

Huh...so that's what's wrong.

Quote

Because a pension plan has very clear and very predictable cash flow needs, investing in short-sighted companies that only care about this year or next year's stock performance is a terrible bet.  The companies planning for success 10+ years out are much, much more attractive by and large.

Every successful stock market investor I know, sets a quota for return on a yearly basis. See...when investors invest, they should expect the "manager" of whatever fund they are in, actually "manage" the account. If a "manager" decides to not invest in a certain stock, because the stock is of a company that doesn't meet their idea of...cause du jour...even though the stock is rising and shows strong growth, then I would have 2 words for that "manager". You're Fired.

To lock people into funds like that is indeed...forcing this on them.

Link to comment
Share on other sites

27 minutes ago, Nationalist said:

Huh...so that's what's wrong.

What is?  ?

27 minutes ago, Nationalist said:

Every successful stock market investor I know, sets a quota for return on a yearly basis.

How many of them do you know?  

27 minutes ago, Nationalist said:

See...when investors invest, they should expect the "manager" of whatever fund they are in, actually "manage" the account. If a "manager" decides to not invest in a certain stock, because the stock is of a company that doesn't meet their idea of...cause du jour...even though the stock is rising and shows strong growth, then I would have 2 words for that "manager". You're Fired.

You buy stocks that are growing and going UP, and you avoid the ones that are going DOWN.  It's so easy! ?

The donkeys moaning about this seem to all be convinced that being ESG means you have a black lesbian CEO and trans-friendly bathrooms, and that everyone drives to work on bicycles.  It's nothing like that at all, but nobody is going to convince you otherwise.  

 

 

 

Link to comment
Share on other sites

33 minutes ago, Moonbox said:

How many of them do you know? 

Some.

34 minutes ago, Moonbox said:

You buy stocks that are growing and going UP, and you avoid the ones that are going DOWN.  It's so easy! 

Indeed. So why is this ESG bucking this easy method?

34 minutes ago, Moonbox said:

The donkeys moaning about this seem to all be convinced that being ESG means you have a black lesbian CEO and trans-friendly bathrooms, and that everyone drives to work on bicycles.  It's nothing like that at all, but nobody is going to convince you otherwise.

I have not said any of that. But ya...whatever...

Link to comment
Share on other sites

20 minutes ago, Nationalist said:

Some.

Sure.  Everyone likes to brag about their great stock picks.  You rarely hear about the bad ones, and almost never about the back-breaking disasters.  

20 minutes ago, Nationalist said:

Indeed. So why is this ESG bucking this easy method?

Because you've outlined the most clichéd investment trap known to man - one that's doomed innumerable self-guided suckers going back centuries.   Simply put, the "method" you describe actually sucks.  

20 minutes ago, Nationalist said:

I have not said any of that. But ya...whatever...

I know you haven't.  I exaggerated it to the point where even you'd agree it's ridiculous.  The far-right's perception of what ESG means is equally exaggerated and absurd, however.  Whatever legislation comes out of this will be worthless, toothless and accomplish nothing.  It's dancing around conflated words and terminology, and will do absolutely nothing to change the way top investment managers invest.  They'll keep investing in good, well-positioned and well-governed companies as opposed to the alternative, and the wailing and gnashing of teeth from the mob isn't going to change that.  

Edited by Moonbox
Link to comment
Share on other sites

6 minutes ago, Moonbox said:

Sure.  Everyone likes to brag about their great stock picks.  You never hear about all of the bad ones.  

Because you've outlined the most clichéd investment trap known to man - one that's doomed innumerable self-guided suckers going back centuries.   Simply put, the "method" you describe actually sucks.  

I know you haven't.  I exaggerated it to the point where even you'd agree it's ridiculous.  The far-right's perception of what ESG means is equally exaggerated and absurd, however.  Whatever legislation comes out of this will be worthless, toothless and accomplish nothing.  It's dancing around conflated words and terminology, and will do absolutely nothing to change the way top investment managers invest.  They'll keep investing in good, well-positioned and well-governed companies as opposed to the alternative, and the wailing and gnashing of teeth from the mob isn't going to change that.  

I don't invest in stocks. Never have...well ok...I do hold onto about 1K of useless crypto my son convinced me to financing for him but...you know...bein' a dad and all...

The ESG is a very poor method of investing. If one is locked into a plan that is using this method, and can't get out of it for whatever reason, then they are being forced into a less profitable investment plan.

I think...to me anyway...that's the crux of the issue.

Link to comment
Share on other sites

48 minutes ago, Nationalist said:

I don't invest in stocks. Never have...well ok...I do hold onto about 1K of useless crypto my son convinced me to financing for him but...you know...bein' a dad and all...

Crypto isn't a stock and it is useless, but the sort of thinking that goes into crypto investing is the same you were trying to describe here.  Invest in things that are going UP and it's easy!  Just avoid stuff that's going DOWN!

The problem is that whatever's up today (or was yesterday) could very possibly be down tomorrow, and the folks who hopped on the bandwagon when things were going up are usually the ones who get blasted up the backside when things go down.  

48 minutes ago, Nationalist said:

The ESG is a very poor method of investing. If one is locked into a plan that is using this method, and can't get out of it for whatever reason, then they are being forced into a less profitable investment plan.

I don't think you actually understand what ESG is and how it's implemented.  Personally, I don't bother with it, don't recommend it to clients, and have in the past talked people out of it.  If a company is focusing too much on ESG as part of their marketing pitch, it's probably because they don't otherwise have a leg to stand on.  

The problem is that these concepts aren't mutually exclusive.  There are "ESG" funds that outperform on a consistent basis, and then there are high performing funds that don't market themselves as ESG but follow and practice many of its principles. 

The other side of it is that there are some bleeding hearts out there that simply won't invest unless their tender souls feel good about what they're doing.  What's the point in taking away their options?  

If you want to go invest in coal mining and Raytheon, nobody's stopping you, but I don't know why you'd feel compelled to limit the options from the granola hemp crowd wanting to feel like they're doing their part.  

  • Like 1
Link to comment
Share on other sites

18 minutes ago, Moonbox said:

Crypto isn't a stock and it is useless, but the sort of thinking that goes into crypto investing is the same you were trying to describe here.  Invest in things that are going UP and it's easy!  Just avoid stuff that's going DOWN!

The problem is that whatever's up today (or was yesterday) could very possibly be down tomorrow, and the folks who hopped on the bandwagon when things were going up are usually the ones who get blasted up the backside when things go down.  

Which is exactly what happened to my son...with my money...I hope he learned something.

If I may bore you a bit... ;)

Years ago, around when I first met my wife, I was sitting with a guy who was also a regular at the pub I frequented. I thought I knew the guy but, as we BSed I realized this guy had made a small fortune just playing the stock markets. I asked him how he decided what to buy and what to stay away from. I never forgot his advise...

'I do a lot of research, but I also watch the public. The public has a way of generally being wrong. Failing that, I ask my wife. She's always wrong.'

19 minutes ago, Moonbox said:

I don't think you actually understand what ESG is and how it's implemented.  Personally, I don't bother with it, don't recommend it to clients, and have in the past talked people out of it.  If a company is focusing too much on ESG as part of their marketing pitch, it's probably because they don't otherwise have a leg to stand on.  

The problem is that these concepts aren't mutually exclusive.  There are "ESG" funds that outperform on a consistent basis, and then there are high performing funds that don't market themselves as ESG but follow and practice many of its principles. 

The other side of it is that there are some bleeding hearts out there that simply won't invest unless their tender souls feel good about what they're doing.  What's the point in taking away their options?  

If you want to go invest in coal mining and Raytheon, nobody's stopping you, but I don't know why you'd feel compelled to limit the options from the granola hemp crowd wanting to feel like they're doing their part. 

Actually...I'm pretty sure I get it. The argument on one side is that nobody is "forcing" people to engage in the practice. But that's just not true...is it. A lot of people get stuck in these funds as a result of their work packages. IMO, the solution would be to give these people dissatisfied with ESG, an easy way to get out of whatever fund they are in, and move the investment. They continue to get the same company contributions to whatever fund they choose.

Link to comment
Share on other sites

1 minute ago, Nationalist said:

Which is exactly what happened to my son...with my money...I hope he learned something.

Hopefully he did, but a lot of people don't.  I have a couple of friends that spend their time staring at TA charts and trying to tell me how they understand where the market is going.  They always have excuses why their analysis turned out wrong.  It was never their fault. 

1 minute ago, Nationalist said:

'I do a lot of research, but I also watch the public. The public has a way of generally being wrong. Failing that, I ask my wife. She's always wrong.'

Sort of tongue-in-cheek but not the worst advice out there.  The best and most consistent investors out there are the ones who take advantage of market dislocations.  That's how Warren Buffet invests, if you want to simplify it.

1 minute ago, Nationalist said:

Actually...I'm pretty sure I get it. The argument on one side is that nobody is "forcing" people to engage in the practice. But that's just not true...is it. A lot of people get stuck in these funds as a result of their work packages.

Considering almost nobody has defined pension plans anymore, very few of them would get forced into anything.  The defined contribution plans would give all of these investors a choice.  95% of them would have no idea whatsoever what they're investing in, and would follow a box-tick exercise and end up in a fund-of-funds that's diversified to the point of extreme mediocrity.   

1 minute ago, Nationalist said:

IMO, the solution would be to give these people dissatisfied with ESG, an easy way to get out of whatever fund they are in, and move the investment. They continue to get the same company contributions to whatever fund they choose.

They almost always can.  Most of these plans (in Canada for example) would be administered by a large FI and would have a large list of funds to choose from.  If their employer is matching their contributions, the employee is entirely in charge of choosing the funds with the benefit plan administrator.  

As I said, I'm not an ESG guy myself, but the hatred and disdain for it is blown out of proportion and it's tied up completely in the greater culture war.  Most of it is nonsense.  The reality is that the bleeding heart ESG funds that only invest in solar power and carebear companies are self-eliminated after not very long.  At the end of the day, the fund has to perform or it's not going to last, whether or not it's ESG.  

  • Like 1
Link to comment
Share on other sites

1 hour ago, Moonbox said:

Hopefully he did, but a lot of people don't.  I have a couple of friends that spend their time staring at TA charts and trying to tell me how they understand where the market is going.  They always have excuses why their analysis turned out wrong.  It was never their fault. 

Sort of tongue-in-cheek but not the worst advice out there.  The best and most consistent investors out there are the ones who take advantage of market dislocations.  That's how Warren Buffet invests, if you want to simplify it.

Considering almost nobody has defined pension plans anymore, very few of them would get forced into anything.  The defined contribution plans would give all of these investors a choice.  95% of them would have no idea whatsoever what they're investing in, and would follow a box-tick exercise and end up in a fund-of-funds that's diversified to the point of extreme mediocrity.   

They almost always can.  Most of these plans (in Canada for example) would be administered by a large FI and would have a large list of funds to choose from.  If their employer is matching their contributions, the employee is entirely in charge of choosing the funds with the benefit plan administrator.  

As I said, I'm not an ESG guy myself, but the hatred and disdain for it is blown out of proportion and it's tied up completely in the greater culture war.  Most of it is nonsense.  The reality is that the bleeding heart ESG funds that only invest in solar power and carebear companies are self-eliminated after not very long.  At the end of the day, the fund has to perform or it's not going to last, whether or not it's ESG.  

Huh...the rules for funds must be different in the USA?

Link to comment
Share on other sites

19 minutes ago, Nationalist said:

Huh...the rules for funds must be different in the USA?

No doubt in certain ways they are, but the broad strokes would mostly be the same and I'm highly, highly doubtful that defined contribution 401k plans (with employer contributions) function much differently there than they do here.  

 

Link to comment
Share on other sites

On 3/3/2023 at 1:57 PM, robosmith said:

IF you had an example of ^this,  you might post it. But you probably do not.

The Center for Retirement Research (Boston College) have in their database 176 public plans from 2001-2018 which are all state administered (2/3 of which have social investing or ESG policies in place). Results show that those state policies mandating  social/ESG policies have significantly lower rates of return. They raise the question of whether social investing should play a role in public pension investing beyond returns. Or are public pension fund boards the right bodies to set foreign and climate policies or is that best left to politicians? It's also unlikely that those making these decisions today will not  bear the brunt of any miscalculations.

Edited by suds
Link to comment
Share on other sites

1 hour ago, Michael Hardner said:

What is meant here by 'public' pension fund?

What were the actual differences in the rates of return in the study?

For some reason I can't provide a workable link but try googling 'Center for Retirement Research at Boston College ESG investing and public pensions'. You should be able to reach or download a PDF labelled SLP74.pdf. In answer to your questions the study they're referring to used data from state  administered pension funds instead of the federal government. The difference in rates of returns between regular state funds and state 'mandated' funds was between 70-90 basis points/yr (or slightly under under 1%/yr) less for the mandated funds.

Edited by suds
Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Unfortunately, your content contains terms that we do not allow. Please edit your content to remove the highlighted words below.
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Tell a friend

    Love Repolitics.com - Political Discussion Forums? Tell a friend!
  • Member Statistics

    • Total Members
      10,712
    • Most Online
      1,403

    Newest Member
    nyralucas
    Joined
  • Recent Achievements

    • Jeary earned a badge
      One Month Later
    • Venandi went up a rank
      Apprentice
    • Gaétan earned a badge
      Very Popular
    • Dictatords earned a badge
      First Post
    • babetteteets earned a badge
      One Year In
  • Recently Browsing

    • No registered users viewing this page.
×
×
  • Create New...