When calling out those who foolishly start a panic by shouting “Fire!” in a crowded theater, one should be careful not to start a rival, perhaps even larger and more irrational, stampede.
Utah State Treasurer Marlo Oaks is out on the hustings with a spiel in which he says a widespread movement to measure the wisdom of investments by something other than just short-term financial gain is the work of Satan.
Really.
But, so far at least, there is no cause to panic. Just a reason for Oaks’ fellow Republicans, and fellow investors, to ignore him as much as possible and lead their party, and our economy, in a more responsible direction.
Citing the biblical End Times book of Revelations, Oaks has been working various audiences, mostly local meetings of the Utah Republican Party, into a frenzy of fear over something called ESG. That means environmental, social and governance. It is a way of looking at investments that an individual, investment fund or government might make in terms of whether the companies whose paper they buy are environmentally and socially responsible and well managed.
It may seem difficult to describe that as a colossal threat to anything. But Oaks is among those giving it his best.
Sadly there are many others, up to and including Utah Gov. Spencer Cox and Attorney General Sean Reyes, who are also taking a stand against ESG investing. If in slightly less apocalyptic language.
Cox is one of 19 Republican governors to sign a letter in support of a move in Congress to ban pension funds from so much as considering ESG factors in their investments. This is a call for government meddling in the marketplace that Cox and company might normally be expected to oppose.
Oaks, recently addressing a meeting of the Salt Lake County Republican Party Convention, thumped the tub of ESG, the United Nations, China, just about everyone but the Jewish Space Laser Corps, warning of a rising dictatorship.
“The goals have been identified. The truth has already been defined that these are the problems, and here are the solutions. The debate is over,” Oaks said.
The debate is a long way from over.
Investors large and small, public and private, are making more use of ESG metrics as they decide where to park their money. To a greater or lesser degree, many of them have decided that putting money into, say, companies that drill for oil or otherwise upset the natural world is not something they feel like doing. Maybe because it makes them feel bad. Maybe because they think the extractive economy is just not a good long-term investment.
Investment advisors are putting out reports that include ESG scores, data that investors may or may not choose to take into consideration as they buy and sell.
ESG may or may not be a successful investing strategy. It may or may not be a genuine effort to promote the sustainable over the boom-and-bust. Or an attempt to appear to be green and responsible even as a particular investment firm continues to put money into Alaska oil and African rare Earth mines.
One thing ESG most definitely is not is a dictatorial plan — from China, the UN, California or Congress — that tells investors where to put their money. To say that ESG is government interference in the marketplace is exactly the opposite of the truth.
To tell investors that they are required to continue to sink their money into less-than-sustainable operations, or into companies that run on socially backward crony capitalism, would make no more sense than a government edict that The Church of Jesus Christ of Latter-day Saints must invest a significant share of its considerable reserves into Anheuser-Busch or Jim Beam, even though to do so would violate the organization’s deeply held beliefs.
There is a risk, perhaps, that by calling attention to Oaks and his utterly absurd, Bible-thumping warning about threats that exist only in an increasing number of fevered imaginations, this bushwa will only gain currency.
It would help if other, more responsible, Republican leaders, from Cox on down, would quietly communicate to Oaks and others that, while socially driven investment decisions may be bad for Utah’s legacy gas, oil and coal industries in the short-term, sustainable investments in sustainable industries are the wave of the future.
Most of all, those who are genuinely concerned about Utah’s economy might see that anything that feeds the state’s image as a crazed theocracy led by conspiracy theorists can only harm our future as an educational, research and innovation hub.
The best response to this silliness from Marlo Oaks, and the hooping and hollering he elicits from Utah Republicans, would not be an attempt to shout them down. It would be for those meetings to include a lot more real Republicans who would respond to these goofy ESG warnings with quizzical looks, stone faces and an early break for the exits.
