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Original filename of the uploaded file is: ESG Woke to Broke 5 Minute Video.mp4
4 Plays3 months ago
Original filename of the uploaded file is: ESG Woke to Broke 5 Minute Video.mp4
this desc was updated via Zencastr on 3/17/2025
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Transcript
Investment in Profitable Companies for Retirement
00:00:01
Speaker
Why do millions of people invest in retirement accounts? Well, the answer is obvious, to have money to live on when you're no longer working. The best way for those accounts to grow is to invest in companies that make a profit.
00:00:14
Speaker
Less profit for those companies means less money for retirement.
ESG vs Traditional Investment Approaches
00:00:18
Speaker
That might seem like common sense, but it's becoming less common, thanks to a new investment strategy called ESG.
00:00:27
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yeah ESG stands for Environmental, Social, and Governance. If you're wondering what that means, you're not alone. Generally, it means that a company's first concern should no longer be how much money it makes, but rather how much social good it does.
00:00:43
Speaker
In other words, get woke or get shamed. If you're an oil company, for example, you're out of luck because by the nature of your business, it's assumed you're destroying the planet.
00:00:54
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Never mind that you're powering homes and hospitals, that doesn't count. In fact, if you're a company just trying to make a profit, you're the problem.
Klaus Schwab on ESG and Profit
00:01:02
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ESG proponent, Klaus Schwab, chairman of the World Economic Forum, puts it this way, we can't continue with an economic system driven by selfish values, such as short-term profit.
00:01:14
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The message is clear. We need ESG to save us from ourselves. Really?
Innovation Driven by Profit: Historical Insights
00:01:19
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The pursuit of profits has fueled many of mankind's greatest innovations and greatest companies.
00:01:25
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It led Elon Musk to build electric cars, Andy Grove to design computer chips, and Reed Hastings to develop the world's most popular streaming service. Everything from aspirins to commercial airplanes to, yes, solar panels and wind turbines came about because of the desire for profit.
00:01:43
Speaker
Profit is why you have a job, clothes, a house, food, and every other necessity, not to mention luxuries. It's the reason why you can live in Phoenix and stay cool, or live in Buffalo and stay warm.
00:01:55
Speaker
The genius of capitalism is that it requires businesses to do good things for society to make a profit.
Capitalism's Role in Promoting Social Good
00:02:03
Speaker
Think about it. If you want to start a business, whether it's a dog hotel or a shoe factory, you'll have to create a product or service that helps others at a price they can afford.
00:02:14
Speaker
If you want to hire employees, you'll have to offer attractive wages and safe working conditions. Otherwise, nobody will work for you. If you want customers, not only will you have to make a good product, but you'll need to cultivate a good reputation.
00:02:28
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That means treating those customers well and offering competitive prices. In a free enterprise system, you can't make money without providing a social good. Capitalism is, by its very nature, conscientious.
00:02:42
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It turns out, then, that profit isn't selfish. It motivates us to contribute our talents to help others.
ESG's Impact on Profit and Innovation
00:02:48
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ESG threatens this system. By denigrating profit, it lessens the incentive and the means to do good.
00:02:56
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Without profits, companies won't have the capital to provide jobs, pay investors, or fund innovation. But that's the world ESG wants you to live in, a world where profit takes second place to a preoccupation with income inequality, race and gender sensitivity, and climate alarmism.
00:03:15
Speaker
But even if you wanted to address those concerns, how would ESG help you do it? That's a fair question because there's no consensus on ESG standards. Here's a good example. Three self-proclaimed ESG watchdogs have given Tesla three completely different ratings, best, worst, and middling.
Challenges with ESG Rating Standards
00:03:34
Speaker
In capitalism, there's a simple metric to determine success—how much money you're making. Under ESG, there's no such thing. It's a judgment call.
00:03:46
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To make ESG investment strategies even more problematic, according to Meyer Statman, professor of finance at Santa Clara University, in the long run, ESG investors are likely to earn lower after-fee returns than non-ESG investors.
00:04:02
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Over a period of, say, 30 years, those fees alone could cost you hundreds of thousands of dollars. So if ESG endangers profits, offers no clear metric for success, and is a mediocre investment, why is it even a thing?
00:04:18
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Well, for two main reasons.
The Appeal of ESG to Elites
00:04:19
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First, yeah ESG allows people like Larry Think, CEO of BlackRock, the world's largest investment company, to feel good about themselves. It's a get out of jail free card for guilty billionaires.
00:04:31
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They preen in the New York Times and the rest of us are stuck with the bill. And second, it's about control. yeah ESG enables an enlightened elite to tell everyone else how to run their companies.
00:04:43
Speaker
Submit to ESG or you won't get that loan or that investment, whether or not it's good for your bottom line and your shareholders. That's how companies and whole economies go from woke to broke.
00:04:56
Speaker
including your 401k. So if somebody tries to sell you on environmental, social, and governance investing, hold on tight to your wallet and to your values. yeah ESG is coming for both.
00:05:08
Speaker
I'm Andy Puzder, Senior Fellow at the School of Public Policy at Pepperdine University for Prager University. Thank you for watching this video. To keep PragerU videos free, please consider making a tax-deductible donation.