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Rekenthaler Report

If You Are Not Already an ESG Investor, You Probably Will Be

The up-and-coming fiduciary standard.

The Back Story
Once upon a time, there was socially conscious investing. Socially conscious investing was primarily punitive, meaning that rather than rewarding companies for being good, it disqualified them for behaving badly. It came in two flavors: religious and political. Religious prohibitions included avoiding firms that loaned money at interest or that were involved in birth control. Divesting from businesses that operated in South Africa was a common political screen.

It seemed that socially conscious investing directly refuted the prevailing investment doctrine of shareholder value, which stipulated that firms should care first, foremost, and perhaps even solely about creating value for their investors, by finding ways to increase their stock prices and/or dividends. Instead, for socially conscious buyers, a company’s first task was to be ethically acceptable.