Call it ‘riskwashing.’
Most stewards of other people’s money want more, not less, information about possible investment risks. Not Republican governors and state treasurers, who have mounted a coordinated campaign from public office to limit or prevent the consideration of ESG, for environmental, social and governance risks, in the management of state and local assets.Take Texas, a pioneer of the anti-ESG movement. The state last year blacklisted JPMorgan Chase, Bank of America, Goldman Sachs and two other large banks that Texas Comptroller Glenn Hegar said discriminated against fossil fuel or firearms companies. Those banks collectively underwrote more than a third of the state’s municipal bonds.
The switch to smaller underwriters has cost taxpayers up to $532 million in extra fees in just the first eight months, according to economists at The Wharton School of the University of Pennsylvania and the Federal Reserve. That includes the hefty $13 million fee charged by Jefferies to manage a $3.4 billion bond offering.Riskwashing: How the crusade against ESG is hurting businesses, taxpayers and retirees – ImpactAlpha