TD₿: ESG Investing: Mostly Theater, Little Substance (a thread) by Lyn Alden
TL;DR ESG investing in its current form fails to address long-term problems and consists of short-term narrative point-scoring and signaling.
Hey Bitcoiners,
The phrase “ESG” was invented in the UN’s “Principles for Responsible Investing” report in 2006 and is now constantly cited by Bitcoin critics in their attacks on Bitcoin’s energy usage.
But what does “ESG” mean exactly?
It stands for Environmental, Social, and Governance. It’s meant to be a set of investment criteria that corporations incorporate to “further developing sustainable investments.”
The ESG investment criteria are pushed on corporate boardrooms from powerful organizations like the World Economic Forum, the UN, the International Business Council, and all the major financial institutions and central banks.
But the problem is…ESG has no clear objective meaning. In fact, the Davos crew has been working for over 15 years to try to create some kind of set of standardized metrics around the term, but despite these efforts, it still remains highly ambiguous.
This has resulted in a massive misallocation of capital. Instead of corporations allocating capital based on the free market, they are instead virtue signaling to adhere to these ill-defined rules invented by central planners.
Lyn Alden dismantled the whole ESG investing framework in this Twitter thread in a way that only Lyn can do (01/17/2022).
If these Bitcoin critics really cared about “ESG investing”, they would do their own research and support Bitcoin mining, not attack it.
Tick tock next block,
Cory Klippsten
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Quote of the Day
“If you’re a manager of fund where Bitcoin is an investment candidate: failure to consider BTC in the mix is gross negligence to your ESG obligations.” - Daniel Batten, ESG Analyst
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