December 30, 2024 — 8:48 PM
Randy, Thank you for your fair and constructive take, even if I’m sure how much of it I agree with. I’m personally not sure whether ESG [done in the right spirit] is the highest form of fiduciary, or, as you say, a ‘gross violation.’ I doubt there is much evidence either way.
The lefty-ism of my introductory note was to get at political irony and point out that regulation itself isn’t right or wrong. How it’s used is right or wrong in the eye of the beholder. Is it right to hog tie Vanguard in a new layer of red tape when it has no history of throwing its weight around with banks, or making ESG calls with its index funds? That preemptive move by the FDIC — albeit with Vanguard quick to sign on — sure sounds like ‘playing politics’ in your vernacular and something China might do to one of its companies. Then again, it may just be a practical good solution, given thjat Vanguard is not a board-shaking company, as Jeff DeMaso points out rightly.
What I think I know is that the world is going the wrong way on climate change and we have been instructed by conservatives that the government has little or no place in trying to address that glaring issue. Then we see private industry i.e. fund managers and investors in this case, step into that void, and try to address climate issues with ESG . Conservatives — in this case — use the ‘socialist’ government to stop free enterprise from using its influence.
The ostrich playbook still says we can destroy the earth so long as it doesn’t ‘destroy value’. I think in the RIA business we are trying to think holistically, which means seeking optimal outcomes [like our grandchildren surviving on Earth] over financial absolutes. Even a new Trump administration hasn’t changed that basic necessity.
