Record losses follow ESG investments

 Clarice Feldman:

...

Why is Black Rock’s position on ESG so significant? And what was its reason for switching from tested investment policies to untested, subjective elements not subject to empirical analysis? Heartland offers an explanation—it was a profitable strategy for Black Rock and one in accord with its founder’s political beliefs that investors can force top-down social policies which they favor, without being accountable for their failures.
...

For a while the emphasis on this new investment strategy worked for Black Rock, drawing in clients. And then it didn’t. In six months in lost $1.7 trillion dollars of client funds This is the largest amount of money ever lost by a single firm over a six-month period.
...

Given this example and the irrational nexus between ESG weighting and performance I think the hyping by Black Rock and others of their novel ESG investing strategy was both a marketing ploy to attract virtue-signaling asset managers and a means to enable trustees to tamp down the disruptions occasioned by shareholder activism. It was never a sound investment practice.

On the bright side, though the investors in this new improved, investment strategy might have just lost a lot of money, Black Rock seems to have made out very well There’s more than one sucker born every minute.
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ESG stands for environmental, social, and corporate governance.  It does not necessarily lead to profits as shown by the record losses. 

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