ESG versus national security

A research paper published by the Duke Financial Economics Center found that ESG ratings and investing ignored human rights abuses in Russia and likely other nations. Reuters likewise reported in 2022 about ESG investment firms ignoring abuses by China and Russia. In fact, while Russia was preparing to invade Ukraine, ESG rating firms like Sustainalytics were applauding Russia’s largest bank for its ESG-related policies.

This creates an uneven playing field for American businesses, where they are held to higher standards than companies located in (and often controlled by) our foreign adversaries. But it gets worse.

A former head of NATO warned in 2014 that Russia was supporting environmental groups in the West as a way to maintain dependence on Russian oil. Hillary Clinton raised the same concerns as Secretary of State. The New York Times has also reported on suspected Russian support for environmental protests abroad. ESG provides a moving set of standards that can be applied to American and other Western businesses to reduce their competitiveness.

ESG policies often benefit other nations at the expense of the United States. They also can become a tool used by foreign adversaries to weaken America and our allies.