Will ESG end up in the Ash Heap of History?
Many Americans see ESG investment policies as a war on the “free market” as an attempt to force companies to adopt “interventionist” policies set by “Wall Street elite” in the workplace and penalize oil/gas companies. Some stakeholders are starting to view ESG investment policies as stifling their liberty: genuine concerns on ESG’s impact on jobs builds confirmation bias driven by headlines of ESG investment flows. As a noticeable example, “ESG investment mandates” have been blamed for Anheuser-Bush InBev’s (BUD) decline in Y/Y sales volume in 2Q 2023[i]. This rhetoric harkens back to President Reagan’s speech about the Soviet Union’s “elite” cadre of Marxist leaders who enforced tyrannical laws that stifled the freedom of its citizens. President Reagan predicted such policies would inevitably end up in the “ash heap of history”. Given that same rhetoric is being used now to counter the growth and adoption of ESG investing, will ESG investing, and “sustainable” public policy initiatives, also meet a similar fate?
DuLac Capital Advisory L.L.C. thinks institutional investors and Wall Street Stakeholders will have to change ESG/Sustainability to fit the needs of America’s traditional “Federalist Society” model of political-economics.
https://www.youtube.com/embed/uCu7-Ka_zbY?feature=oembed
Executive Summary:
The rise of ESG investment policies in recent years has ignited a polarizing debate among Americans, with many viewing these policies as an infringement on the principles of the free market and individual liberty. This skepticism draws parallels with historical instances of interventionist governance that ultimately faced downfall. Given the fervent rhetoric and ideological divisions surrounding ESG, the question arises: Is the trajectory of sustainable investing destined to follow the same fate as those historical policies consigned to the "ash heap of history"?
This essay delves into the multi-faceted discourse surrounding ESG investment policies, examining the clash between proponents of traditional economic paradigms and advocates of sustainable investing. By analyzing the institutional implications, political dynamics, and performance metrics of ESG strategies, we aim to shed light on the potential future of ESG in the ever-evolving landscape of financial and policy decisions. ESG will not likely be ended, but it will likely be amended.
· ESG Backlash and Liberty Concerns: “ESG Backlash” now ominously produces 666,000 results on Google. The rise of ESG investment policies has sparked a backlash among many Americans who view them as infringing upon the free market and imposing interventionist measures dictated by Wall Street and DC power brokers. The rhetoric draws parallels with the historical case of the Anti-Trust era backlash against the Gilded Age 120 years ago—stakeholders must ponder ESG's long-term viability given this possible historical parallel, less face heightened policy risk of being cast as the modern Standard Oil Trust.
· Institutional Implications: The ESG backlash has led to debates about the allocation of capital and the potential misallocation of resources due to favoring ESG initiatives over traditional energy investment such as Oil/Gas. The clash between states such as Texas, and pro renewable energy states such as Maryland, highlights the challenges of finding a unified approach to sustainable investing. While ESG was not a priority for investors a decade ago, it has now become a major consideration for many stakeholders and institutional investment firms.
· Political Football of ESG: The ESG debate mirrors historical divisions in the country's political landscape, with varying perceptions of ESG across states and regions. Hamilton & Madison wrote about “rival factions” in the Federalist Papers—the Constitution was designed to deliberately slow down rapid change via government forces or private actors. This fragmentation in a federalist society presents challenges and opportunities for investment strategies and policy development. This will result in divergent requirements for Impact Investing based on regional priorities.
· ESG Performance Analysis: Contrary to concerns that ESG investments underperform, analysis shows that ESG-focused funds are not automatically a negative contributor to performance relative to their broader sector, or parent index. To help drive data-driven decisions, this report examined Goldman Sachs Just U.S. Large Cap Equity ETF (JUST), iShares Global Clean Energy ETF (ICLN), and the underlying constituents an Oil/Gas focused Invesco Equal Weight S&P Energy ETF (RSPG), respectively. The analysis shows “ESG impacted beta strategies” do not, by themselves, necessarily mean lower return compared to an appropriate ESG-agnostic benchmark. The devil is in the detail though as ESG investing criteria, ratings, and desired outcomes are widely dispersed. There simply is not enough standardization of clean data and widely accepted ESG outcomes to determine whether the total $35 Trillion in (mainly institutional cross asset class investments) that screen for some ESG metrics, impair or enhance long term total return objectives.
· Balancing ESG Mandates: To address the diverse attitudes toward ESG, and its next iteration, Impact Investing, stakeholders must adopt an approach that recognizes America’s historical “federalist based society.” This reality has long balanced regional preferences vs. centralized national standards. This approach involves tailoring ESG strategies to align with each state's specific needs, enabling policies that promote both economic growth and socially responsible outcomes. McDonald’s Corp launched vegetarian only restaurants in India 10 years ago, yet that doesn’t mean it stopped buying cattle from Texas[ii]. Traditional industries like oil and gas face challenges due to ESG concerns, but these challenges might not automatically lead to underperformance.
· Impact on Valuations: Impact on Valuations: ESG factors can significantly affect the valuation metrics of companies, especially in industries such as oi/gas, mining/metals, pharmaceuticals, and chemicals. Perceived negative ESG headwinds can result in reduced valuation multiples and pose long-term risks to companies' financial profile. This mirrors the situation faced by tobacco companies in the 1990s. Investment flows to indexed based strategies have primarily targeted broad market strategies rather than sector-exclusionary ones. From 08/21/2003 to 08/21/2023, flagship SPDRS S&P 500 ETF Trust (SPY) has recorded over $101 Billion in net flows, Vanguard 500 Index Fund (VOO) has recorded $22.5 Billion in net flows, and iShares Core S&P 500 ETF (IVV) has received $179.4 Billion in net flows. The traditional energy focused sector fund, Energy Select Sector SPDR Fund (XLE) has recorded $18.4 Billion in net flows during that period. Given this macro backdrop of broad market index investing, active investors will remain the ultimate “Undertakers” for unviable sub-industries[iii].
· Alexander Hamilton goes back to Wall Street: The shift from traditional ESG beta strategies to Impact Investing that considers regional “tastes” in a scaled manner will become increasingly important. This theme traces its roots back to Hamilton’s theory on factions and the need then for Federalism in America. Wall Street stakeholders will need to capture more localized requirements from factions that currently assert exclusion from the contemporary ESG and Impact Investing discourse. Not all ESG strategies are created equal, but one man’s trash may be another man’s treasure. Preferences on what defines the “E” and the “S” within their regional impact investing framework will be increasingly gauged by the “voting machine” and ultimately judged by the weighing machine of “Mr. Market.” A common core of Governance measuring standards will likely emerge and span across the policy factions. No side of the debate will ever support a fund labeled the “Gordon Gekko Enron Opportunity Strategy”. ESG strategies can coexist with traditional strategies, and a regionalized approach to impact investing can help cater to different preferences and values while aiming for positive returns.
As ESG investment policies encounter resistance and skepticism from various quarters, maintaining the delicate balance between economic growth and social responsibility remains a key challenge. Rather than a one-size-fits-all approach, embracing the history of America’s federalist model, which respects regional diversity and priorities, could pave the way for expanding impact investing solutions that cater to distinct economic and social contexts. This nuanced approach acknowledges the complexity of the debate and aims to chart a course that reconciles the ideals of both free-market principles and responsible stewardship of societal well-being. The evolution of ESG strategies will find a balance between financial performance and societal impact to manifest to Impact Investing— accounting for regional and factional differences within a federalist framework.
ESG Backlash is Rooted in Real Concerns
The search phrase “ESG backlash” currently (and ominously) nets 666,000 results on Google[i]. Globally, the total market cap for 9,168 Developed and Emerging Markets companies per MSCI is $74 Trillion as of June 30, 2023[ii]. ESG oriented ETFs and Mutual Funds managed $255 Billion as of year-end 2022 according to a study done by BlackRock— doubling 2016 AUM (assuming the datapoint is for the U.S. )[iii]. Investment research and ESG rater, Morningstar, estimates that globally, ESG funds managed $2.5 Trillion by year-end 2022[iv] (e.g., inclusive of ETFs, hedge funds, endowment mandates, etc.) that incorporate ESG criteria to be over $35 Trillion globally[v], which includes public and private market equity and the $100+ Trillion global bond market.
· This investment and policy White Paper is the first in a three part series that will examine the recent backlash against the ESG, place the context of recent reaction against ESG within historical context, and examine the validity of the claims for and against ESG adoption at an institutional level.
· The next paper will provide a deeper dive into thorny policy issues such as the ESG sub-component DEI based investing— particularly how Wall Street may have to “amend it, [or they will] end it” as Bill Clinton famously said in the 1990s.
· The third will focus on public-private partnership investing for a positive social impact purpose—and where policy makers on both sides of the aisle may find common ground.
The intent is to take policy and investment leaders’ views at face value, while exploring the root cause of how various factions have become anchored in opposite sides of the ESG wave. Rather than refuting certain policy leader views and sustainability investing initiatives as bad faith, these White Papers will instead try to equip decision makers with data-driven insight to better frame their decisions on how to make Impact Investing work for their community.
ESG Backlash Background— Seeds of a modern Anti-Trust Movement
The exponential rise in ESG adoption by both institutional and individual investors has encountered a growing wave of resistance since 2022, thus casting a spotlight on the complex interplay between sustainable investing and historical economic paradigms based on Milton Friedman principles of “maximizing shareholder value”, which underpin classic fiduciary obligations. The fear is that ESG investing—both organic and through mandates by governments and companies—are producing a “crowding out” effect, thus misallocating capital to initiatives at companies that don’t generate ROIC for its shareholders, and starving capital from traditionally underweighted industries, such as Oil/Gas. Popular Fox news host Laura Ingraham called ESG investing policies the new “thought and governance police for corporate America[vi]”. Recent key “anti-ESG” headlines noted below should cause investors to examine their public policy exposure risk for owning ESG filtered investments, and policy makers to examine how to deal with the ESG genie now that it’s out of the bottle.
· In June 2023, a viral clip (BlackRock says it’s been taken out of context) video emerged on Twitter that showed the CEO of BlackRock discussing how BlackRock, as a fiduciary asset manager, has to “force behaviors” on companies the firm owns on behalf of its largely index based ETF and mutual fund investors[vii].
· Texas legislature passed a law that will effectively ban insurance companies from taking ESG factors into consideration[viii]. Texas Governor Abbott said ESG is a “war on American Energy.”
· Senator Mike Braun of Indiana and Rep. Andy Barr led a Congressional effort to prohibit U.S. fiduciary fund managers that consider ESG factors as investment considerations from 401K plans; it was vetoed by the White House[ix].
· S&P Rating agency is going to stop using ESG factors as a risk for its credit ratings[x].
· Other stakeholder factions have protested and sought action via tangible shareholder action through public pensions, to compel large Index-focused Asset Managers to fully divest (rather than minimize) from companies such as Prison REITs, civilian firearm companies, Defense, and all Oil/Gas exposure.
Examining the political football of ESG based on the tale of two governors can provide institutional fund managers and policy makers a prism through which to view the trajectory of ESG investing from an organic growth perspective, regulatory action for and against its proliferation, new index/product creation, and perception on whether ESG appropriately considers fiduciary investment mandates to maximize return for shareholders and benefit pensioners and 401K owners. The current policy divide can be illustrated by examining the “tale of two cities” between Florida and Maryland. The solution will be on bringing such leaders, who are both veterans, to the table and finding a common core of outcomes that each side seeks via investment impacts on policy (e.g., support companies that provide sustainable job growth and thus tax base), and then go back to their relative constituents and augment the core with their own regional faction’s desired criteria.
ESG Political Football—"Terps vs. Gators” Model
Gov. Ron DeSantis of Florida is famous nationwide for his “war on wokeness”, and even has a motto: “Florida is where woke goes to die.” Florida is considered one of the fastest growing states economically and population wise in the country—particularly since the covid19 era, which only elevated migration to the sunshine state. Gov. DeSantis ordered his state to divest $2 Billion from BlackRock due to its perception of being a torchbearer for ESG[xi]. Many Americans view any investment policy implemented at the company or political level that factors in non-economic considerations to achieve a greater societal good as tantamount to interfering in the free market.
Dr. Milton Friedman popularized the theory that companies should only be focused on maximizing shareholder value. That ethos has been the bedrock of politics in both United States and Great Britain over the last 40 years since the Reagan/Thatcher era. They tend to discount ESG proponents who posit that ESG factors are truly investment risk/reward drivers on a medium to long-term basis[xii]. This cohort of stakeholders and policymakers are skeptical of major financial institutions working with non-profits to create investment solutions designed to reduce the wealth gap or decrease environmental toxins. If they are bad for society, then the market will eventually penalize the company, such as what happened to Countrywide Financial during the 2008 Financial Crisis. People are voting with their feet on this type of political framework given Florida now has more jobs than New York and produced the second highest number of tech jobs in 2021[xiii].
In comparison, newly elected Gov. Wes Moore of Maryland has actively embraced ESG initiatives into state policy. Gov. Moore spearheaded a climate initiative within his first 100 days to identify ways for the state of Maryland to harness the power of public-private partnerships to reduce climate risk in the state. Gov. Moore recently announced plans to move Maryland to 100% non-fossil fuel energy by 2035, with plans to boost wind based power to produce 8 gigawatts of energy— enough power for three million homes[xiv]. There are many states that reference decarbonization initiatives as the reason for implementing more renewable energy projects through public-private partnerships.
Kara Succoso Mangone, Sustainable Finance Chief at Goldman Sachs, has spoken about how some of the firm’s $750 Billion for Sustainable investing initiatives through 2030 may include public-private initiatives[xv]. The current headwind for measuring ESG/sustainable investing impact is in how the data is measured and standardized across ESG stakeholders. According to a 2021 study by Goldman Sachs, an analysis of ten different ESG rating companies showed there to be only a 0.3 correlation in their ratings. The lack of consistency in how ESG is currently measured, particularly across the value chain, can create a wide dispersion in how states consider whether ESG incentives or mandates are a net positive impact for sound public policy. To reduce direct carbon output, one state may prefer wind energy, another may prefer nuclear energy. Both states though will have to contend with environmental risks from storing “used parts”: retired wind turbine blades, and radioactive spent fuel rods from nuclear plants, are both notoriously difficult to safely eliminate.
Lessons from the Federalist Papers for the modern ESG Debate
Alexander Hamilton and James Madison warned against how competing factions in America could weaken governance and thus usher in tyranny, veiled as a savior in The Federalist Papers. Their prescription for this problem was Federalism: divided government across state and federal cohorts, rooted in a process that mitigates rapid changes due to temporal sentiment— yet still can produce meaningful change for society when enough consensus emerges nationwide. ESG has become a contested issue across state lines. Therefore, ESG investing mandates and how inputs are measured, will also become fractured at a state level. This trend will limit wide-scale adoption nationwide of a singular standard. This scenario though may bring up opportunities to develop investment solutions that cater to the two camps: “anti-ESG” strategies for states such as Texas, while “pro-ESG” strategies in states such as California. Google Trends shows searches for “Woke ESG” vs the more standard “Vanguard/BlackRock ESG” key search terms to be associated—Texas, New York, California, and Florida were the top four states with those terms…
Given that a growing share of Americans now view ESG in a pejorative manner (particularly Boomers[i]), and given our knowledge on behavioral economic biases from Professor Daniel Kahneman, how will this emerging ESG tug of war impact adoption, future policy, and investment solution development? Examining the Gilded Age Period in history provides both sides of the ESG saga a model for what may emerge in terms of the nexus between politics, policy, and the ESG investment world.
“The Men who Built America” Run into “Progressive Era” Backlash
The ESG perception problem emerges in the context of the ethos of what built America and made it great. There was a popular History Channel series ten years ago that illustrated the business drama of the mid to late 1800s: The Men Who Built America. It showed the tales of Vanderbilt, Junius Morgan, J. Pierpont Morgan, Rockefeller, Carnegie, and Ford in their quest to grow their companies in a fast growing America. The show illustrates there was initially very little government influence or “stakeholder concern” in whether J.P. Morgan (the firm and the actual person) invested in railroad, oil, and steel companies. There is no portrayal of citizen pushback in Ohio regarding environmental concerns from oil shipped via Standard Oil pipelines from Pennsylvania. That’s the context that half the country view of how business should be done— and underscores their view of the importance of trusting the invisible hand of the free market to enable innovation and growth, rather than the iron fist of “big government.”
We know from reading The House of Morgan, that Junius and his son were not heavily factoring in social issues such as health of labor impacted by “black lung” disease from coal mines when investing in railroads and Edison electric utilities. John D. Rockefeller probably did not give significant consideration to the environmental and social impact of well water contamination from oil drilling leaks. Nonetheless, given the American state infrastructure bond defaults in America in the 1840s, the Morgan investment firm probably learned quickly to recognize governance risk as an investment risk in its future private sector companies: such lessons were likely applied when J.P. Morgan invested in the struggling Northern Pacific Railway and restructured it— enabling the company to connect rail from coast to coast.
Likewise, in 1901, J.P. Morgan acquired Carnegie Steel, for $480 Million via cash, stock, and debt, for what was the largest transaction in history— in comparison, the U.S. federal budget was approximately $521 Million that year[ii]. The acquisition did consider governance issues as Mr. Morgan restructured Carnegie Steel and its competitors into a consolidated trust company, U.S. Steel Corporation, Mr. Morgan appointed several J.P. Morgan & CO. partners on the trust’s board to ensure the first billion dollar company was managed the “Morgan way”:
· Limit government regulation.
· Eliminate labor involvement with management decisions on deployment of capital.
· Decrease market competition to maximize profits via scale through consolidation.
· Limit non-founder/family/banker shareholder rights and transparency.
This may seem an extreme manifestation of Dr. Milton Friedman’s view on the market economy, but one must look at it in the lens of that era. After all, less than ten years ago, the Federal and Local government in Pennsylvania gave Carnegie Steel management the authority to use lethal force on striking steel workers at its Homestead Plant. They were demanding better conditions and pay. Just imagine if J.P. Morgan had to factor in Carnegie Steel’s steel ruthless/paleo-capitalist approach for labor relations as a negative Social (S factor) in its acquisition valuation: the deal would likely not have gone through if modern ESG screens were applied. In the end, J.P. Morgan cared most about profit: Carnegie’s profit grew 10X from 1892 (following the Homestead Strike) to 1900. According to longtime Value Investing expert, Dr. Bruce Greenwald, businesses that drive quality profit growth and expand their market via building moats of competitive advantages, are the ones that investors reward in the long-term[iii].
During the President Teddy Roosevelt era, public sentiment, and thus public policy began to change. The Trusts run from Wall Street and American business began to be viewed as too powerful for society—often lambasted in exposes such as “Treason in the Senate”, “The Jungle”, and politicians such as William Jennings Bryant and Huey Long. By 1906, Congress passed the Meat Inspection Act, Pure Food and Drug Act, and the anti-trust Hepburn Act: these effectively amounted to the Federal Government implementing “ESG” mandates into law at the chagrin of the free market. A passage from the popular Upton Sinclair book may help the modern reader understand how the Federal Government shifted from being in the pocket of big business in 1905, to passing federal laws that effectively boosted the “S” (Social Impact) of meat packing giants:
"A man could run his hand over these piles of meat and sweep off handfuls of the dried dung of rats. These rats were nuisances, and the packers would put poisoned bread out for them; they would die, and then rats, bread, and meat would go into the hoppers together. This is no fairy story and no joke; the meat would be shoveled into carts, and the man who did the shoveling would not trouble to lift out a rat even when he saw one."
The mounting chorus of calls to dismantle Trust companies reverberated across Capitol Hill and State Houses, rooted in concerns over the adverse societal consequences stemming from consolidated shareholder power. This intensifying debate underscores a profound tension between corporate dominance and the general welfare of the citizenry. That debate from 100+ years ago may have echoes in the current ESG pushback. The recent ESG backlash is primarily driven by policy makers (and some citizen stakeholders) skeptical of unproven "green" technology that divert capital from Oil/Gas sources to reduce net Carbon output: they fear lower growth, decreased jobs, and are doubtful that renewable energy works. Institutional Oil/Gas investors in fracking and pipeline states are likely to have sympathy to that objection. Nonetheless, constituents left and right will still likely favor laws that prevent unsanitary practices such as what Sinclair described in 1906. Additionally, ESG skeptics do not support a modern company employing the National Guard to fire on striking workers, as happened during Carnegie's Homestead Steel strike in 1892. Thus, Government mandates over the last 115 years have forced businesses to evolve from Gilded Age era practices towards workers and consumers. These mandates were akin to proto-ESG rules but derived from government stakeholders, rather than private investors.
Americans have become anchored to support at least a bare minimum of ESG standards via government regulation. After all, the most popular song on iTunes currently is Rich Men North of Richmond, by Oliver Anthony, an unsigned country singer. It’s become popular across America for its advocacy of higher pay for working class Americans such as miners. No Republican (or Democrat) is going to call for the old days where a coal miner baron could run roughshod over his companies’ miners, creating unsafe work conditions that caused collapses and “black lung” disease. Nonetheless, there are increasing calls from significant stakeholders to “break up” the large financial asset managers and index providers who have ESG strategies to their investing options; this mirrors the anti-trust era. Given that context, what are the problems with ESG criteria at the policy and investor level? The most cited headline by skeptics is that ESG considerations naturally contradict the fiduciary duty to maximize investor returns[iv]. The theory posits that if Warren Buffet is the world’s most famous and respected long-term investor without ever making a big deal of “ESG risk factors”, why re-invent the wheel?
Obviously, though, Mr. Buffet has long written and discussed the importance of solid company governance[v]: his famous 1980s era Capitol Hill testimony on what went wrong with Solomon Smith Barney’s governance is used as a textbook example at business schools on ethical leadership. Both sides of the debate should champion the “G” in ESG. There are concerns that in the age of significant public and private pension plan gaps, and increasing variability risk in insurance payouts, and the retirement challenge that the average America worker faces with their 401K, the last thing policymakers and fiduciaries would want is to distort the investment curve with unproven incentives for the “E” and “S” components. The fear is that ESG mandates at a system wide level will throw “good money after bad”; thus distort the Investment curve as ESG accelerates capital to Solar/Wind/Hydrogen and “Labor/DEI” initiatives that will not produce a positive Return on Invested Capital (ROIC). This would do nothing but increase the retirement challenge due to portfolio sub-par performance, and therefore elevate the “Social” problems even more…
Contact RyanScott@dulaccapitaladvisory.com for the full White Paper to learn investing, policy, and product development implications for shareholders and stakeholders given the increased ESG backlash.
[i] Pew Research study, 05/26/2021 on measures for the “Green Economy”: https://www.pewresearch.org/science/2021/05/26/gen-z-millennials-stand-out-for-climate-change-activism-social-media-engagement-with-issue/
[ii] Acquisition of Carnegie Steel, Fricke Coke, et al: https://historicpittsburgh.org/islandora/object/pitt%3AUS-QQS-MSS315/viewer
[iii] Dr. Bruce Greenwald, Value Investing: From Graham to Buffet and Beyond. https://www.wiley.com/en-us/Value+Investing%3A+From+Graham+to+Buffett+and+Beyond%2C+2nd+Edition-p-9780470116739
[iv] Congressional Testimony from February 28, 2023 illustrates growing concern by factions in Congress of ESG being used by fiduciaries that could harm return for pensioners/401K investors: https://www.congress.gov/congressional-record/volume-169/issue-38/house-section/article/H932-1?q=%7B%22search%22%3A%5B%22ESG%22%5D%7D&s=1&r=1
[v] Harvard Law School: Governance Buffet Style: https://corpgov.law.harvard.edu/2013/03/29/governance-buffett-style/
Columbia Business School’s examination of Warren Buffet’s Public Statements on Governance and Berkshire Hathaway’s actual investments: https://business.columbia.edu/faculty/research/warren-buffetts-commentary-accounting-governance-and-investing-practices-reflected
[i] Google Search result for “ESG Backlash” as of 08/16/2023:
[ii] MSCI ACWI IMI Index Overview per June 30, 2023: https://www.msci.com/www/fact-sheet/msci-acwi-all-cap-index/05806520
[iii] Total US ESG ETFs are $400 Billion: https://www.statista.com/statistics/1297487/assets-of-esg-etfs-worldwide/
[iv] Morningstar ESG fund global ESG fund estimate: https://www.bankrate.com/investing/esg-investing-statistics/#stats
[v] Bloomberg Intelligence notes ESG globally across asset classes is $35 Trillion: https://www.bloomberg.com/company/press/esg-may-surpass-41-trillion-assets-in-2022-but-not-without-challenges-finds-bloomberg-intelligence/
[vi] Fox News, Laura Ingraham criticizes ESG: https://www.youtube.com/watch?v=uCu7-Ka_zbY
[vii] BlackRock Responds to Viral Video Clip about “forcing behaviors”: https://www.thestreet.com/technology/wall-street-titan-blackrock-responds-to-new-attacks
[viii] https://www.texastribune.org/2023/06/12/texas-legislature-insurance-esg-rates/
[ix] Senate passes bill to precent 401k fiduciary fund managers to consider ESG factors: https://www.cnbc.com/2023/03/01/esg-bill-senate-vote-on-overturning-federal-rule-on-esg-investments.html
[x] S&P Ratings agency will no longer use ESG factors to determine overall bond credit ratings: https://fortune.com/2023/08/08/ratings-agency-esg-grading-borrowers-esg-credit-risks-political-backlash-woke-capitalism/
[xi] https://www.reuters.com/business/finance/florida-pulls-2-bln-blackrock-largest-anti-esg-divestment-2022-12-01/
[xii] Dr. Andrew Ang, Head of Factor Investing at BlackRock, discusses how ESG should be considered in a factor investing framework: https://podcasts.apple.com/us/podcast/the-bid/id1441032838?i=1000469266717
[xiii] Florida job growth: https://moneywise.com/employment/florida-overtakes-new-york-in-job-numbers
[xiv] Gov. Moore announces clean energy plan: https://esgnews.com/marylands-governor-moore-announces-major-offshore-wind-energy-initiatives-during-international-forum-in-baltimore/
[xv] Interview with Kara Succos Mangone on Investing Integrity Podcast, June 2023: https://podcasts.apple.com/us/podcast/investing-in-integrity/id1534855787?i=1000616078487
[i] Following a marketing campaign that included an actor who identified in the LGTBQ community and advocate, a significant backlash occurred via social media outlets and some mainstream news that called for boycotting all of Anheuser-Busch-InBev products. SkyNews: https://www.youtube.com/watch?v=qildxk9Z7AM
[ii] McDonald’s launched meatless restaurants in India in 2012: https://www.cbsnews.com/news/mcdonalds-to-beef-up-in-india-with-meatless-menu/
[iii] Fund Flows for SPY, VOO, IVV, and XLE computed from www.ETF.com https://www.etf.com/tools/etf-fund-flows-tool-result?tickers=IVV%2CVOO&startDate=2003-08-21&endDate=2023-08-21&frequency=DAILY
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