“Without explicit congressional legislation, it would be inappropriate for us to use our monetary policy or supervisory tools to promote a greener economy or to achieve other climate-based goals. We are not, and will not be, a ‘climate policymaker.’”

Jerome Powell, Chairman of the Federal Reserve, January 10, 2023

Regardless of whether you agree with Mr. Powell’s assertion, the very fact that the head of the U.S. central bank felt the need to address the issue (when frankly most of his audience was waiting for him to talk about inflation) is a telling indicator of how prevalent the issue of Environmental, Social, and Corporate Governance (ESG) investing has become recently.

In the past decade, there has been a growing interest in ESG investing. Many firms have taken to almost boasting about their commitment to environmental, social, and corporate governance principles in investing. For example, BlackRock made sustainable investing and investor activism a hallmark of the firm’s overall philosophy and strategy, while Salesforce’s top executives in June 2022 issued a letter to stakeholders to talk about “leading with [their] values.” They are far from alone.

It's no wonder that ESG business practices are front of mind for corporations: ESG matters to m...

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