Business
ESG doctrine and why it should not be adopted in professional organizations

From the Frontier Centre for Public Policy
By Graham Lane | Ian Madsen
The following introductory comments by Ian Madsen, Senior Policy Analyst, Frontier Centre for Public Policy provide background on Graham Lane whose attached letter to CPA Manitoba strongly criticizes that organization’s embrace of ESG.
Graham Lane is a retired CA and has had a multifaceted professional career spanning almost 50 years in the public and private sectors of seven provinces as a Senior Executive and Consultant.
In the public sector, before concluding his career as the Chairman of the Manitoba Public Utility Board (PUB), he consulted for three provincial governments and was employed by four provinces. In Manitoba, he was the CEO of Credit Union Central, bringing in online banking, a Vice-President of Public Investments of Manitoba, the interim President of Manitoba Public Insurance (MPI), reorganizing the corporation after its massive losses of 1986, a Vice-President of the University of Winnipeg, and the CEO of the Workers Compensation Board, restructuring the insurer and returning it to solvency. His experience with Crown Corporations goes well beyond Manitoba, he was the Comptroller of Saskatchewan’s Crown Investments Corporation, and a consultant reviewing government auto insurance in BC and workers compensation in Nova Scotia. He received the gold medal in Philosophy as an undergraduate, and a Paul Harris Fellowship from Rotary International for excellence in vocational service. Throughout his career, and wherever he worked, consulted or volunteered, he maintained an external objectivity. In recent years the Frontier Centre for Public Policy has been honoured by his presence of the Centre’s Expert Advisory Panel where he has been able to share his extensive public and private sector operations knowledge.
Environmental, Social and Governance Standards, so-called ‘ESG’, and scoring arose from ‘Responsible Investing’ efforts in the 1970’s and 1980’s. Institutional and other investors sought to influence corporations that were seen to be involved in, first, the Vietnam War, and, later on, in conducting business in Apartheid-era South Africa. Since then, the movement has morphed, now evolved into ESG.
ESG is essentially a covert way of exerting control over public companies by means other than buying control in the stock market. It is a ‘so-called’ ‘Social Justice’ movement. It seeks to impose non-market ideology on publicly traded companies, such as ‘Green Energy’ and ‘Diversity, Equity and Inclusion’, or, ‘DEI’. The latter two are the main goals of the effort, and are divisive and destructive. There are three paths that this crusade takes: regulatory, professional, and institutional.
The regulatory one is to compel governments to require that ESG standards be applied. This can occur through regulatory agencies such as the Ontario Securities Commission, the most powerful such body in Canada, or through its sister regulatory bodies in other provinces and territories. Federal and provincial legislation can also be passed and implemented to force some or all ESG-related strictures upon corporations.
This institutional path exerts influence upon the largest investors in Canada: public pension plans, such as the Canada Pension Plan and its CPP Investment Board, Quebec’s Caisse de depot et placements, which does the same for enrolees in Quebec; the federal Public Service Pension Plan, Ontario Teachers; and other provincial and professional pension plan investment bodies. Many, if not all of them, to a greater or lesser extent, have already agreed to and endorse ESG ‘principles’, and now attempt to induce the companies they invest in to subscribe to those edicts.
The professional path is, perhaps, the most pernicious. ESG scoring and rating are akin to accounting and financial reporting and analysis, so the professional bodies responsible for those things, such as provincial and national accounting professionals associations, and national and international associations of financial analysts, such as the Chartered Financial Analysts Institute, have begun to adopt ESG regimens.
However, ESG scoring is not just harmful, it is wildly subjective and susceptible to inaccuracy. ESG evolved from Marxist notions of ‘equity’. It is aligned with collectivist, non-market ideology. Transferring much or most managerial decision-making to those with neither direct expertise nor responsibility for its consequences would be irresponsible, an attack on capitalism itself.
Informed and strong opposition, as in the following letter from 2023 by Graham Lane, to the President of the Manitoba office of the Chartered Professional Accounts, should be heeded if citizens, taxpayers, investors and society at large want to avoid the Canadian economy becoming dominated by and managed by ESG criteria. These diverge radically from traditional proven fiduciary and corporate stewardship standards and principles – in favour of ‘Social Justice’ approved outcomes – which potentially damage or destroy returns for pension plan members, and other indirect and direct investors and the economy as a whole.
Ian Madsen
Senior Policy Analyst
January 4, 2024
Text of letter begins below:
Graham Lane, CPA CA (retired)
xxx (address withheld)
Winnipeg, MB
Geeta Tucker, FCPA, FCMA
President and CEO
CPA Manitoba Office
1675 – One Lombard Place
Winnipeg, MB
R3B OX3
August 26, 2023
Re: ESG courses and accreditation, CPA – “A New Frontier: Sustainability and ESG for CPAs and business professionals” (CPA Canada Career and Professional Development)
Dear Ms. Geeta Tucker:
I recently read, with concern, that the association is offering ESG ‘training’, towards immersing members in validating the Environmental Social Governance – ESG’ -movement’. (“A New Frontier: Sustainability and ESG for CPAs and business professionals.”) I also note, with further concern, a supporting column published on the subject (July/August 2023 Pivot CPA magazine). Our profession and members should ‘think twice’ before ‘jumping in’.
“ESG” stands for environment, social and governance. ESG investors aim to buy the shares of companies that have demonstrated their willingness to improve their performance in these areas. ESG is an acronym that refers of environmental, social, and governance standards that socially conscious investors use to select investments. These criteria consider how well public companies safeguard the environment and the communities where it works, and how they ensure management and corporate governance met high standards. For many people, ESG investing is more than a three-acronym. It’s a practical, real-world process for addressing how a company serves all its stakeholders: workers, communities, customers, shareholders and the environment. ESG offers one strategy for aligning your investment with your values, it’s not the only approach.”
But, the ESG ‘movement’, originally driven by good intentions, has been co-opted by lobbyists, special interest groups, and various NGOs. Recent reviews have revealed ESG’s lackluster performance in creating meaningful environment change, and others have highlighted chronic abuse of flawed methodologies.
ESG has gradually suffused the business and finance world, from its origins in academia and the ‘activist’ movements of various ‘social justice’ interest groups. Now, through the actions of provincial and national CPA bodies, our profession is validating and endorsing the central tenets and precepts of ESG valuation, which is misguided and harmful. ESG is antithetical to the aims of the accounting profession, which is, in part, to give honest, objective and rigorous appraisal of the assets, liabilities, and the profit and cash generating capacity of firms. Risk factors and externalities, including environmental issues, are already covered by GAAP and IFRS standards in financial reporting.
While the proponents of ESG promote it as a means of providing a fuller perspective on important aspects of a firm’s place in society, its community, and the ecosystem, and of its handling of other ‘stakeholders’, who are neither shareholders nor managers of a firm, it does not. In fact, by dubiously evaluating those other aspects of a firm’s status, it badly serves investors by creating possibly devastating conflicts and contradictions. This could imperil a firm and its ability to act autonomously towards providing goods and services to the public, jobs to its employees, and dividends (or capital gains) to its owners (ultimately, the public).
The problem of ESG evaluation and its ‘scoring’ are well-known. There is a lack of consistent standards and objectivity, including those of quantitative metrics that are logical and germane. ESG’s principles are dedicated to diverting and subverting top management; i.e., by substituting other ‘stakeholder’ concerns or aims from those of the firm – which is, principally, to seek short-term and long-term profitability and viability, subject to the constraints of laws, regulations, and physical limitations.
It is important to recall that ESG’s origins were in social activism, with the ‘S’ linked to anti-Apartheid movements on university campus and shareholders’ meetings in the 1980’s and ‘90’s. Then the ‘S’ was ‘Responsible Investing’ – an attempt to isolate and boycott the then-racist regime in South Africa. Then, by bringing the-apartheid regime to the negotiating table, with representatives of the disenfranchised opposition, eventually, it brought to an end to Apartheid itself.
Efforts should continue to draw attention to ‘conflict diamonds’, and minerals being extracted by indentured children and adults in the Democratic Republic of the Congo, along with the continuing oppression of minority groups in regions of China. For these situations, and, other places around the world where there are violent or corrupt regimes, western companies should be careful as to their dealings. Yet, these problems are generally already noted as business risks in proper, professional, corporate reporting, and are also subject to the law and multilateral guidelines and sanctions.
The ‘Environmental’ component of ESG is, perhaps, the primary one that the anti-capitalist movement have been most preoccupied with. It, the movement, accepts entirely, and bases its ideology on, presumptions that are not, despite media rhetoric, accurate. It is not true that global temperatures that are unadjusted or otherwise manipulated by un-objective persons are rising.
Nor is rising temperatures are ‘entirely’ due to higher levels of greenhouse gases in the atmosphere. The level of greenhouse gases in the atmosphere is not the most important factor in the direction, or magnitude, of any warming temperatures that might occur. Nor do any of some vaunted climate models predict (at least with any degree of certainty) what temperatures will be anywhere on the planet, let alone on average. Such efforts have repeatedly provided false projections.
Media and academic pundits have cited heat waves, or other events, as evidence of the tangible effects of purported warming, but these have been anecdotal and ignored other events, with contradictory evidence in other regions. Past predictions of ice cap and glacier melting, desertification, and more and stronger storms and other dire events, have yet come to naught.
Another fraught part of the ‘E’ in ESG scoring is determining ‘Scope 1, 2 and 3’ GHG emissions. The first one, ‘Scope 1’, is not ‘terribly difficult’ to do, but the other two Scopes 2 and 3, need to delve into what suppliers, customers and others do with the goods or services of the subject firm. These would be extremely difficult to determine let alone accurately quantify – and can be very expensive and/or unreliable to even attempt to calculate. At best, such tests might also give a distorted impression of an environmental impact – even ‘damage’ ’ that the firm may, or may not be, imparting.
Finally, the whole ‘Green Transition’ has become a rent-seeking lobby, attempting to capture government and its tax dollars. Their proponents’ supposition of touted ‘benefits’ of solar panels, wind turbines, electric vehicles and batteries – drastically altering or decimating the conventional energy, transportation and agriculture industries – are often erroneous or fraudulent, ignoring the full costs, financial and environmental, of their proposals.
The ’G’, ‘Governance’, part of ESG is also elusive and amorphous. While some of it has to do with the accountability of upper management, that is already covered by the responsibility of the Compensation, Nomination and Succession committees of the Boards of Directors (of all but the smallest companies), and also by regulations and supervision of applicable provincial Securities Commissions. Any malfeasance by managers or other employees, or by governments or other overseas organizations, involving bribery or other crimes, is covered by laws already. Engagement with ‘less-than-perfect’ regimes overseas is unavoidable for some industries, and it is unlikely that any quantitative scoring of such interactions or presence would or could be validly determined.
Another aim of the ESG effort is to compel companies to commit to some form of DEI: ‘Diversity, Equity and Inclusion’.
In practice, DEI cannot merely be about outreach to historically disadvantaged or under-represented communities, but cqn lead to active discrimination against employees or potential hires who are not members of those communities. Commitment to hiring and promotion goals in those communities is legally questionable, but that is almost the least of the problems DEI entails. One of the worst is about the engagement of DEI directors, or outside DEI consultants, to conduct divisive and stressful DEI training, such as sensitivity and ‘microaggression’ awareness and role-playing exercises.
ESG scoring that rewards destructive efforts would or could make companies and organizations alter their operation to appear to ‘earn’ higher scores, while actually damaging their ability to foster a productive work environment, retain qualified staff, generate an adequate rate of return on invested capital, or survive as a going concern.
Another element of the ‘G’ in ESG is to try to inject parties other than shareholders or management into Governance, diluting shareholders’ control – which could or would obscure responsibility and accountability, and could badly delay or derail important capital allocation and other corporate decisions. These groups are suppliers, customers, those affected by the operations or products or services of the company, and communities in which the company operates, and potentially others. A covert attempt to subvert capitalism itself, and the market economy, might happen.
ESG advocates have engendered support by claiming that higher-ESG rated firms, and the shares in those firms, perform better than the ‘typical’ company. However, that is untrue. Studies of Canadian and American ESG and ‘Ethical’ funds (over the past five, ten, and even longer time periods) indicate that they underperform index funds; i.e., funds that invest in the entire market of large firms traded on a stock exchange.
Any funds that claim otherwise are consciously, or unconsciously investing in a style tilted to certain sectors; quite often the low-environmental impact IT sector. Such companies can perform well in a shorter time frame. When examining ESG funds, moreover, it often turns out that they invest in most of the same companies as the index funds – though perhaps with a higher management fee. Also, they could have peculiar criteria for higher ESG ratings, most glaringly rating some oil companies higher than other apparently ‘Green’ ones, such as Tesla. Elimination of low-ESG rated firms from investing can concentrate risk by narrowing diversification, thus violating a central, crucial tenet of investment risk management.
ESG has gained considerable support from corporate interests, including prominent institutional investors such as Blackrock (Chairman, Larry Fink) and public pension funds. While such ‘responsible investing’ may have a glowing aura, it can also have a pernicious effect of trying to coerce corporate management to attain public policy that ‘progressive’ politicians, academics, think tanks and other operatives believe are paramount. Those goals can supersede the shareholder returns that are vital to guarantee beneficiaries of pension funds and other institutional investment portfolios receive their promised benefits. This could violate the fiduciary duty of investment portfolio managers, which is to strive for the best risk-adjusted return that they can. (Several ‘green energy’ companies’ share prices have declined, some drastically in the past year.)
Several state governments in the United States have prohibited ESG-based investment.The Saskatchewan and Alberta provincial governments may also intercede if this ‘movement’ strikes at the vital energy industry.
Giving the considerable reputational power of CPAs, for the Association to ‘educate’ its members in a potentially destructive endeavour, such as ESG evaluation, is a mistake. It would be folly to add yet more risk and damage by validating and promoting ESG.
ESG advocates are now on the defensive, from information available recounted herein. Shouldn’t our profession review its decision to promote ESG?
Yours Sincerely,
Graham Lane, CPA CA (retired)
Former Chairman, Manitoba’s Public Utilities Board
c.c. Pamela Steer, CEO, President and CEO, CPA, Canada
Paul Ferris, Editor, Pivot, CPA Canada
Carbon Tax
The book the carbon taxers don’t want you to read

By Franco Terrazzano
Prime Minister Mark Carney wrote a 500-page book praising carbon taxes.
Well, I just wrote a book smashing through the government’s carbon tax propaganda.
It tells the inside story of the fight against the carbon tax. And it’s THE book the carbon taxers don’t want you to read.
My book is called Axing the Tax: The Rise and Fall of Canada’s Carbon Tax.
Axing the Tax: The Rise and Fall of Canada’s Carbon Tax
Every now and then, the underdog wins one.
And it looks like that’s happening in the fight against the carbon tax.
It’s not over yet, but support for the carbon tax is crumbling. Some politicians vow to scrap it. Others hide behind vague plans to repackage it. But virtually everyone recognizes support for the current carbon tax has collapsed.
It wasn’t always this way.
For about a decade now, powerful politicians, government bureaucrats, academics, media elites and even big business have been pushing carbon taxes on the people.
But most of the time, politicians never asked the people if they supported carbon taxes. In other words, carbon taxes, and the resulting higher gas prices and heating bills, were forced on us.
We were told it was good for us. We were told carbon taxes were inevitable. We were told politicians couldn’t win elections without carbon taxes, even though the politicians that imposed them didn’t openly run on them. We were told that we needed to pay carbon taxes if we wanted to leave a healthy environment for our kids and grandkids. We were told we needed to pay carbon taxes if we wanted to be respected in the international community.
In this decade-long fight, it would have been understandable if the people had given up and given in to these claims. It would have been easier to accept what the elites wanted and just pay the damn bill. But against all odds, ordinary Canadians didn’t give up.
Canadians knew you could care about the environment and oppose carbon taxes. Canadians saw what they were paying at the gas station and on their heating bills, and they knew they were worse off, regardless of how many politicians, bureaucrats, journalists and academics tried to convince them otherwise. Canadians didn’t need advanced degrees in economics, climate science or politics to understand they were being sold a false bill of goods.
Making it more expensive for a mom in Port Hope to get to work, or grandparents in Toronto to pay their heating bill, or a student in Coquitlam to afford food won’t reduce emissions in China, Russia, India or the United States. It just leaves these Canadians, and many like them, with less money to afford everything else.
Ordinary Canadians understood carbon taxes amount to little more than a way for governments to take more money from us and dictate how we should live our lives. Ordinary Canadians also saw through the unfairness of the carbon tax.
Many of the elites pushing the carbon tax—the media, politicians, taxpayer-funded professors, laptop activists and corporate lobbyists—were well off and wouldn’t feel the brunt of carbon taxes. After all, living in a downtown condo and clamouring for higher carbon taxes doesn’t require much gas, diesel or propane.
But running a business, working in a shop, getting kids to soccer and growing food on the farm does. These are the Canadians the political class forgot about when pushing carbon taxes. These are the Canadians who never gave up. These are the Canadians who took time out of their busy lives to sign petitions, organize and attend rallies, share posts on social media, email politicians and hand out bumper stickers.
Because of these Canadians, the carbon tax could soon be swept onto the ash heap of history. I wrote this book for two reasons.
The first is because these ordinary Canadians deserve it. They worked really hard for a really long time against the odds. When all the power brokers in government told them, “Do what we say—or pay,” they didn’t give up. They deserve to know the time and effort they spent fighting the carbon tax mattered. They deserve all the credit.
Thank you for everything you did.
The second reason I wrote this book is so people know the real story of the carbon tax. The carbon tax was bad from the start and we fought it from the start. By reading this book, you will get the real story about the carbon tax, a story you won’t find anywhere else.
This book is important because if the federal Liberals’ carbon tax is killed, the carbon taxers will try to lay blame for their defeat on Prime Minister Justin Trudeau. They will try to say that carbon taxes are a good idea, but Trudeau bungled the policy or wasn’t a good enough salesman. They will try to revive the carbon tax and once again make you pay more for gas, groceries, and home heating.
Just like with any failed five-year plan, there is a lingering whiff among the laptop class and the taxpayer-funded desk rulers that this was all a communication problem, that the ideal carbon tax hasn’t been tried yet. I can smell it outside my office building in Ottawa, where I write these words. We can’t let those embers smoulder and start a fire again.
This book shows why the carbon tax is and always will be bad policy for ordinary Canadians.
Franco’s note: You can pre-order a copy of my new book, Axing the Tax: The Rise and Fall of Canada’s Carbon Tax, here: https://www.amazon.ca/Axing-
2025 Federal Election
Poilievre To Create ‘Canada First’ National Energy Corridor

From Conservative Party Communications
Poilievre will create the ‘Canada First’ National Energy Corridor to rapidly approve & build the infrastructure we need to end our energy dependence on America so we can stand up to Trump from a position of strength.
Conservative Leader Pierre Poilievre announced today he will create a ‘Canada First’ National Energy Corridor to fast-track approvals for transmission lines, railways, pipelines, and other critical infrastructure across Canada in a pre-approved transport corridor entirely within Canada, transporting our resources within Canada and to the world while bypassing the United States. It will bring billions of dollars of new investment into Canada’s economy, create powerful paycheques for Canadian workers, and restore our economic independence.
“After the Lost Liberal decade, Canada is poorer, weaker, and more dependent on the United States than ever before,” said Poilievre. “My ‘Canada First National Energy Corridor’ will enable us to quickly build the infrastructure we need to strengthen our country so we can stand on our own two feet and stand up to the Americans.”
In the corridor, all levels of government will provide legally binding commitments to approve projects. This means investors will no longer face the endless regulatory limbo that has made Canadians poorer. First Nations will be involved from the outset, ensuring that economic benefits flow directly to them and that their approval is secured before any money is spent.
Between 2015 and 2020, Canada cancelled 16 major energy projects, resulting in a $176 billion hit to our economy. The Liberals killed the Energy East pipeline and passed Bill C-69, the “No-New-Pipelines” law, which makes it all but impossible to build the pipelines and energy infrastructure we need to strengthen the Canadian economy. And now, the PBO projects that the ‘Carney cap’ on Canadian energy will reduce oil and gas production by nearly 5%, slash GDP by $20.5 billion annually, and eliminate 54,400 full-time jobs by 2032. An average mine opening lead time is now nearly 18 years—23% longer than Australia and 38% longer than the US. As a result of the Lost Liberal Decade, Canada now ranks 23rd in the World Bank’s Ease of Doing Business Index for 2024, a seven-place drop since 2015.
“In 2024, Canada exported 98% of its crude oil to the United States. This leaves us too dependent on the Americans,” said Poilievre. “Our Canada First National Energy Corridor will get us out from under America’s thumb and enable us to build the infrastructure we need to sell our natural resources to new markets, bring home jobs and dollars, and make us sovereign and self-reliant to stand up to Trump from a position of strength.”
Mark Carney’s economic advice to Justin Trudeau made Canada weaker while he and his rich friends made out like bandits. While he advised Trudeau to cancel Canadian energy projects, his own company spent billions on pipelines in South America and the Middle East. And unlike our competitors Australia and America, which work with builders to get projects approved, Mark Carney and Steven Guilbeault’s radical “keep-it-in-the-ground” ideology has blocked development, killed jobs, and left Canada dependent on foreign imports.
“The choice is clear: a fourth Liberal term that will keep our resources in the ground and keep us weak and vulnerable to Trump’s threats, or a strong new Conservative government that will approve projects, build an economic fortress, bring jobs and dollars home, and put Canada First—For a Change.”
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