ESG was supposed to be the future of smart investing. But the future is looking increasingly politically incorrect according to Axios’ new report on the “exodus of money” from “sustainable investments funds”.
ESG was designed to force corporations to follow the Progressive agenda. BlackRock is perhaps the best example of this. The smart money would go to the firms that had the best records in “green energy”, the most leftist public relations (and contributions, of course), and the buttinsky DEI departments. departments.
The money poured in. Until now. Investors will always bail out when returns don’t materialize. Morningstar data shows that sustainable investment funds, including EFTs, saw $8.8 billion in net outflows in the last quarter. The largest-ever outflow is the latest in an ongoing negative trend that began last year.
Axios’ left-wing spun that rising interest rates make the future less valuable than the present. But before they spun too hard, they damaged office furniture. “That’s bad for ESG investments which generally seek to bet more on a greener and brighter future, rather than the cash flow of the next quarter.”
The true indicator is the performance of “sustainable” funds when compared to the broad markets. These are generally up, despite the same high-interest rate headwinds.
Axios may spin ’til they vomit, but it won’t change the figures.
The massive withdrawal of “sustainable” funds from the last quarter was despite Washington’s big thumb on the scale.
The Green New Deal Lite was the Inflation Reduction Act. As the administration admitted later, the 2022 law didn’t do anything to combat inflation. However, it spent more than two-thirds of its $1.2 billion cost on green energy gimmicks. The law, as I said earlier this week is Biden’s trillion-dollar attempt to recreate the industrial policies of Japan in the 1980s. “Japan experienced a “lost decade” after the collapse of that house, I told you back then. “And nothing has improved in the last 20 years.”
Remember Solyndra? This was just a drop in a bucket of failures compared to the Biden Administration.
Another equally ill-named act was the Infrastructure Investment and Jobs Act of 2021. It was another $1.2 trillion blunder, spending only 9 cents on infrastructure. It created no full-time jobs in the private industry.
Investors are more concerned with generating profits than they are about all of this. Green New Deal Lite hasn’t done much to help us “transition into a clean energy society” except to raise energy prices. Even the heavily subsidized electric vehicle market appears to have plateaued much earlier and lower than anticipated.
Maybe money will start to flow back as Washington and other state governments continue subsidizing and mandating “clean” energy gimmicks and EVs. For now, however, smart money is being spent elsewhere.
