NYC Comptroller Brad Lander on ESG: Attacks on ESG Are Attacks on Corporate Governance

ESG and Corporate Governance

• 🎯 ESG is fundamentally about corporate governance, as the 'G' explicitly stands for governance.
• 💡 Attacking ESG proposals while accepting proposals on executive compensation or board roles is contradictory, as these are all aspects of governance.
• 🔑 The assertion that ESG is extraneous to a company's bottom line is challenged, with the argument that governance is inherently linked to financial performance.

Evaluating Financial Risks

• 🧠 Investors must evaluate a broad set of risks, including regulatory, operational, legal, governance, environmental, and workplace factors.
• ⚠️ Drawing a neat line between what is purely 'pecuniary' and what is not is nonsensical; all these factors can impact a company's financial health.
• ⚡ An example is given of concerns at Tesla when Elon Musk was not CEO and pursued actions that could harm EV sales, which is a pecuniary risk for investors.
• 📈 Investors should not be prevented from gathering all necessary information to make informed decisions about their fiduciary duties.

Climate Risk and Financial Risk

• 📊 The statement "Climate risk is financial risk," as articulated by BlackRock's Chairman, is presented as a fundamental truth, not a political stance.
• ⚠️ Red state treasurers' opposition to BlackRock for acknowledging climate risk is seen as an attack on the basic principle that climate change poses financial risks.
• 📉 This opposition has led to a walk-back on voting for proposals that simply provide disclosure, such as a JP Morgan Chase proposal that BlackRock ultimately did not support.
• 📌 Financial officers in blue states, conversely, support sustainability programs, recognizing their promotion of long-term shareholder values.