News Stories Around ESG Orphans, ESG in General
ESG Orphans’ Mark Neuman on TWTR Space
https://twitter.com/i/spaces/1OdKrzEEPRkKX
Orphans’ sum: Mark on TWTR space, talking, “Truth in ESG.” Theme, research behind $ORFN. 5600 listeners tuned in. Hosted by George Noble.
ESG Pushback, Confusion
https://www.forbes.com/sites/jacobwolinsky/2022/09/08/are-defense-stocks-now-esg/?sh=2a6b20591c81
Orphans’ sum: ESG outflows net, volume in ESG in tech, confused ratings agencies, and a general lack of transparency. Things we saw, starting to come out more and more. Tide’s rising.
Fiduciary Duty Questions
https://www.wsj.com/articles/esg-cant-square-with-fiduciary-duty-blackrock-vanguard-state-stree-the-big-three-violations-china-conflict-of-interest-investors-11662496552
Orphans’ sum: Fiduciary responsibilities, pecuniary interests versus altruistic ones. Seeing it a lot more now. More anticipation of flow reversion.
Time to Abandon ESG?
https://spencerfernando.com/2022/08/31/its-time-to-consign-esg-to-the-ash-heap-of-history/
Orphans’ sum: Quote 1: “The advancement of humanity requires abandoning failed ideas. ESG has proven itself to be one of the most anti-human, and anti-advancement ideas we’ve seen in a long-time.”
Quote 2: “Kyle Bass: “ESG [policies]…are going to end up starving the poor children of the world and killing many of them…I can’t believe it’s not on the front page of every paper, every day.”
Outflows soon? Inflows to ex-ESG, anti-ESG, ESG Orphans?
Confusion Continues Within ESG Funds
https://nz.finance.yahoo.com/news/asset-managers-renaming-esg-funds-100000773.html
Orphans’ sum: ESG “Greenwashing,” renaming of funds, the shell game continues, “23% of Article 8 funds, which have been found to include weapons makers, fossil-fuel giants and tobacco companies, don’t deserve to be treated as ESG within its framework.” Everyone digging in their heels.
FL Pensions Pushing Back on ESG
https://finance.yahoo.com/news/esg-pros-republican-anti-woke-100007109.html
Orphans’ sum: Global pushback on ESG altruism over fiduciary responsibility. DeSantis removed ESG screening for FL pension funds. In the EU, “Legal duty to invest in the long-term best interest of beneficiaries…Ukraine revealed a new dimension regarding the importance of ESG.” Orphans love it when a plan comes together. Weapons tailwind RTX, LMT, NOC, GD. Overall for Orphans, inflows.
Ukraine Needs Weapons, Will Exchange for Gas…ESG What?
https://libertarianinstitute.org/news/ukraine-asks-europe-for-more-weapons-offers-gas-to-curb-rising-prices/
Orphans’ sum: “The government in Kiev has relied on America…with Washington sending tens of billions in weapons and direct economic support.” Classic. New taxonomy for weapons to be ESG-friendly? And the weapons will be “green?” ESG Orphans RTX, LMT, NOC, GD.
More on Weapons, Defense and ESG
https://www.army-technology.com/news/revealed-the-aerospace-and-defence-companies-leading-the-way-in-esg-2/
Orphans’ sum: NOC, RTX, and BA all mentioned as those with the most opportunity in the “ESG adoption” game.
Nuclear Energy Abandoned Now to Be Revisited?
https://247wallst.com/sponsored-content/2022/08/26/esg-nuclear-power-and-proxy-voting/
Orphans’ sum: David Hess, World Nuclear Association, said “Inclusion [of nuclear energy] in the taxonomy is vital for unlocking access to affordable financing.” Slowly the worm is turning. More tailwinds to NEE, D, DUK, AEP, SO.
There’s a changing of the guard coming in ESG. The pushback has begun. It got skewed too far in one direction, all ESG, all the time, that the regulators are pushing back now. Pension plans are removing ESG handcuffs. The luxury of ESG is being usurped by necessities and realities thrust upon investors and the markets, resulting from constrained capital imposed by ESG.
This is all part of our thesis at Constrained Capital. Changing of the taxonomy, re-writing the rules, investors seeking higher expected returns, are all of what we touched on in our research available on our websites. Now momentum is growing. ESG skewed the investment landscape. Weak returns and higher fees along with failed objectives have caused a backlash at ESG and a reversal of flows. We expect this to continue.
Follow us on TWTR: @ESGOrphan and @MarkNeuman18.
If you would like to have a call to learn more about the ESG Orphans Index and $ORFN directly, please contact me at: mark@constrainedcapital.com and we can arrange a time to speak.
