You know Your Survival Guy doesn’t want company executives mixing their culture war initiatives with their fiduciary duty to shareholders, but they do it anyway. You invest, and they win. Now, new regulations and corporate DEI and ESG mandates have created a job boom for corporate culture warriors. The Wall Street Journal’s Allysia Finley explains:
This boom owes in part to Biden administration regulations. But the bigger drivers are progressive employees who demand that their employers indulge their politics as well as ESG police like BlackRock that order corporations to produce detailed reports about their labor and environmental practices.
According to a proposed climate disclosure rule from the Securities and Exchange Commission, an unidentified manufacturing company spends between $600,000 and $750,000 a year on producing climate and sustainability disclosures. Twenty of its employees work part-time on climate disclosures from November to March each year.
Employees at an unidentified energy firm spend 7,500 to 10,000 hours annually on climate reporting. The company pays external advisers up to $1.35 million. That’s a lot of time and money these companies could be spending on activities that actually benefit investors, workers and customers. How about United Airlines reassign its CO2 attendants to answering customer calls?
Progressives won’t admit it, but sustainability disclosures are effectively make-work projects. Shovelling out paperwork does nothing except support other similarly wasteful ESG jobs. A whole industry has grown around these disclosures.
Take the case of businesses buying carbon offsets to mitigate their emissions. This practice often entails paying loggers not to cut down trees for lumber, which allows businesses to claim they are locking up carbon in forests. To estimate the CO2 value of these offsets, companies hire “consulting foresters” to measure the girth and height of trees. Auditors then must review their calculations.
Businesses thus claim they are reducing their CO2 emissions even though they aren’t. The result is higher lumber and housing prices—and overgrown forests and out-of-control wildfires. Many trees in Canada and California that companies paid to preserve for carbon offsets have gone up in smoke during recent wildfires.
This is a good metaphor for the ESG and DEI industries. They destroy productive economic investments while creating deadweight losses across the economy.
The overgrowth in ESG and DEI jobs is perhaps nowhere better illustrated than academia. Clarkson University has a job posting for a “sustainability coordinator” for its athletics department. The job requires a master’s in environmental policy and ski-coaching certification. Apparently even ski instructors must be able to calculate carbon emissions nowadays.
Action Line: Why would a ski instructor need a certification in environmental policy? Every bit of the corporate budget that pays employees working on DEI or ESG is less available for shareholders or productive reinvestment by the company. That’s unfair to the shareholders who have invested their hard-earned retirement funds in companies relying on a return that will help them achieve their investment goals. When you want to talk about your investment goals, I’m here.
E.J. Smith - Your Survival Guy
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