Environmental, social, and governance investment practices distract investors and corporate management from maximizing long-term profitability, which is often achieved through innovation, cost control, and customer focus. By diverting attention away from priorities that align with increased productivity and toward a shifting array of inconsistently defined social-impact criteria, the ESG investment movement could be a long-term threat to continued economic growth.
But before expanding on this criticism, ESG deserves its due. Individual investors have, for decades, considered factors other than maximizing risk-adjusted returns. Personally, I never wanted to buy stocks in tobacco companies from the time I first had money to invest
