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No reliable evidence that ESG investing produces above-average returns

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3 minute read

From the Fraser Institute

By Steven Globerman

Despite growing skepticism among investors, as evidenced by their withdrawal of billions of dollars from ESG equity funds so far in 2024, many finance industry leaders continue to claim that ESG-focused investing produces above-average returns.

But is that true?

Environmental, social and governance (ESG) is a movement designed to pressure businesses and investors to pursue larger social goals. According to ESG theory, firms that receive poor ratings from ESG rating agencies should lose investment dollars. Yet the claim that ESG-focused investing can help investors do well by doing good has received surprisingly little empirical support from academic studies.

However, according to a new study published by the Fraser Institute, which tracked 310 companies listed on the Toronto Stock Exchange from 2013 to 2020, neither ESG rating upgrades nor downgrades were related in a statistically significant way to the stock market performance of companies.

Moreover, because the study finds that ESG ratings changes—which, when released, are effectively new information for investors—are not consistently related to financial returns, ESG ratings are likely not relevant to the expected future profitability of publicly listed companies in Canada.

This of course raises the question—if new information (i.e. ratings changes) about a company’s ESG-related practises is not statistically related to equity returns from investing in that company, why do money managers pay for the services of ESG rating companies?

One possible reason is that managers pass a substantial share of the costs along to customers who are willing to sacrifice financial returns (due to higher management fees) to express their commitment to environmental sustainability and other social causes. Another possible reason is that promoting ESG-focused investment alternatives appears to have been, at least until recently, an effective marketing tool.

But again, the empirical evidence suggests there’s no reliable statistical relationship between ESG-focused investing and the risk-adjusted returns earned by investors. And since asset managers typically charge higher fees for ESG-focused mutual funds, ESG investment strategies are more likely to underperform than overperform conventional investment strategies.

Certainly, if some percentage of investors choose to pursue ESG-related investment strategies, even at the cost of lower risk-adjusted investment returns, there should be no legal or regulatory restrictions on doing so. However, securities regulators should closely monitor the investment industry to ensure it provides reliable and up-to-date information about the financial performance of ESG-focused investment products that portfolio managers market to the public.

At the same time, when ESG advocates push for more government-mandated ESG disclosures from companies in Canada, policymakers should be wary of any claims that greater disclosure mandates will improve the financial performance of companies.

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US government gave $22 million to nonprofit teaching teens about sex toys: report

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From LifeSiteNews

By Anthony Murdoch

The Center for Innovative Public Health Research’s website suggests teenage girls make their ‘own decisions’ about sex and not let their parents know if they don’t want to.

For almost a decade, the U.S. government funded a group that actively works to teach kids how to use sex toys and then keep them hidden from their parents to the tune of $22 million.

According to investigative reporter Hannah Grossman at the Manhattan Institute, The Center for Innovative Public Health Research (CIPHR) has been educating minors about sex toys with public funds.

Records show that the millions given to the group since 2016, according to its website, go toward “health education programs” that “promote positive human development.”

However, the actual contents of the programs, as can be seen from comments from CIPHR CEO Michele Ybarra, seem to suggest that its idea of “human” development is skewed toward radical sex education doctrine.

In 2017, CIPHR launched Girl2Girl, which is funded by federal money to promote “sex-ed program just for teen girls who are into girls.” Its website lets users, who are girls between ages 14 and 16, sign up for “daily text messages … about things like sex with girls and boys.”

The actual content of some of the messages is very concerning. Its website notes that some of the texts talk about “lube and sex toys” as well as “the different types of sex and ways to increase pleasure.”

The website actively calls upon teenage girls to make their “own decisions” and not let their parents know if they don’t want to.

Grossman shared a video clip on X of Ybarra explaining how they educate minors about the use of “sex toys” and dealing with their parents if they are found out.

The clip, from a 2022 Brown University webinar, shows Ybarra telling researchers how to prepare “young person(s)” for her research.

In 2023, CIPHR launched Transcendent Health, which is a sex-education program for minors who are gender confused. This initiative received $1.3 million of federal grant money that expired last month.

Grossman observed that the federal government “should not fund programs that send sexually explicit messages to minors and encourage them to conceal these communications from parents.”

She noted that in order to protect children and “prevent further harm,” U.S. President Donald Trump’s Department of Health and Human Services “should immediately cancel CIPHR’s active contract and deny its future grant applications.”

“By doing so, the Trump administration can send a clear message: Taxpayers will no longer foot the bill for perverted ‘research’ projects,” she noted.

The Trump administration has thus far, through the Department of Government Efficiency (DOGE), exposed billions in government waste and fraud. Many such uses of taxpayer dollars are currently under review by the administration, including pro-abortion and pro-censorship activity through USAID, “Diversity, Equity, and Inclusion and neo-Marxist class warfare propaganda” through the National Science Foundation, and billions to left-wing “green energy” nonprofits through the Environmental Protection Agency.

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Canadian Police Raid Sophisticated Vancouver Fentanyl Labs, But Insist Millions of Pills Not Destined for U.S.

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Sam Cooper

Mounties say labs outfitted with high-grade chemistry equipment and a trained chemist reveal transnational crime groups are advancing in technical sophistication and drug production capacity

Amid a growing trade war between Washington and Beijing, Canada—targeted alongside Mexico and China for special tariffs related to Chinese fentanyl supply chains—has dismantled a sophisticated network of fentanyl labs across British Columbia and arrested an academic lab chemist, the RCMP said Thursday.

At a press conference in Vancouver, senior investigators stood behind seized lab equipment and fentanyl supplies, telling reporters the operation had prevented millions of potentially lethal pills from reaching the streets.

“This interdiction has prevented several million potentially lethal doses of fentanyl from being produced and distributed across Canada,” said Cpl. Arash Seyed. But the presence of commercial-grade laboratory equipment at each of the sites—paired with the arrest of a suspect believed to have formal training in chemistry—signals an evolution in the capabilities of organized crime networks, with “progressively enhanced scientific and technical expertise among transnational organized crime groups involved in the production and distribution of illicit drugs,” Seyed added.

This investigation is ongoing, while the seized drugs, precursor chemicals, and other evidence continue to be processed, police said.

Recent Canadian data confirms the country has become an exporter of fentanyl, and experts identify British Columbia as the epicenter of clandestine labs supplied by Chinese precursors and linked to Mexican cartel distributors upstream.

In a statement that appears politically responsive to the evolving Trump trade threats, Assistant Commissioner David Teboul said, “There continues to be no evidence, in this case and others, that these labs are producing fentanyl for exportation into the United States.”

In late March, during coordinated raids across the suburban municipalities of Pitt Meadows, Mission, Aldergrove, Langley, and Richmond, investigators took down three clandestine fentanyl production sites.

The labs were described by the RCMP as “equipped with specialized chemical processing equipment often found in academic and professional research facilities.” Photos released by authorities show stainless steel reaction vessels, industrial filters, and what appear to be commercial-scale tablet presses and drying trays—pointing to mass production capabilities.

The takedown comes as Canada finds itself in the crosshairs of intensifying geopolitical tension.

Fentanyl remains the leading cause of drug-related deaths in Canada, with toxic supply chains increasingly linked to hybrid transnational networks involving Chinese chemical brokers and domestic Canadian producers.

RCMP said the sprawling B.C. lab probe was launched in the summer of 2023, with teams initiating an investigation into the importation of unregulated chemicals and commercial laboratory equipment that could be used for synthesizing illicit drugs including fentanyl, MDMA, and GHB.

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