{"id":1618757,"date":"2022-08-22T09:17:41","date_gmt":"2022-08-22T13:17:41","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1618757"},"modified":"2022-08-22T09:18:04","modified_gmt":"2022-08-22T13:18:04","slug":"gabriella-hoffman-high-esg-scores-foreshadow-economic-decline","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/gabriella-hoffman-high-esg-scores-foreshadow-economic-decline\/","title":{"rendered":"Gabriella Hoffman: High ESG Scores Foreshadow Economic Decline"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">16<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fgabriella-hoffman-high-esg-scores-foreshadow-economic-decline%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1618757&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div><\/div>\n<aside id=\"aside1\" class=\"left aside-wrapper aside-wrapper-950\">\n<\/aside>\n<p dir=\"ltr\">With the recent <a href=\"https:\/\/www.ceres.org\/news-center\/press-releases\/corporate-leaders-call-congress-promptly-pass-inflation-reduction-act\">passage<\/a> of the costly, yet deceptively named, Inflation Reduction Act in the Senate, the Environmental, Social, and Governance (ESG) movement will be further emboldened. The IRA prioritizes funding for environmental justice, clean energy investments, and achieving net zero emissions, among its climate provisions. The bill\u2019s passage, however, exposes the public to its shortcomings and harmful economic footprint. \u00a0<\/p>\n<p dir=\"ltr\">ESG\u2019s most troubling aspect\u2014its reporting regime\u2014is facing immense scrutiny because rankings allow companies and governments to project a \u201cgood\u201d social responsibility image. But do they hold water? Given their subjective nature and unaccountability stemming from self-reporting, ESG rankings are\u00a0<a href=\"https:\/\/www.tenderalpha.com\/blog\/post\/sustainability-esg\/what-makes-esg-ratings-problematic\">flawed<\/a>.<\/p>\n<p dir=\"ltr\">Scores correspond to each of the three prongs\u2014ESG\u2014but the \u201cE\u201d prong measuring an individual country\u2019s carbon and methane emissions doesn\u2019t paint an accurate picture. The\u00a0<a href=\"https:\/\/www.worldeconomics.com\/Concepts\/ESG\/Default.aspx#Environment\">World Economics Index<\/a> scores environmental impact from 0 (high environmental impact) to 100 (low environmental impact) scale.\u00a0<\/p>\n<p dir=\"ltr\">Unfortunately for ESG boosters, high \u201cE\u201d scores haven\u2019t shielded three nations in the news\u2014Ghana, the Netherlands, and Sri Lanka\u2014from experiencing economic turmoil. \u00a0<\/p>\n<p dir=\"ltr\">The African nation of Ghana should first be examined. It currently\u00a0<a href=\"https:\/\/www.worldeconomics.com\/ESG\/Environment\/Ghana.aspx\">scores<\/a> a 97.7 out of 100 on the ESG Index. The\u00a0Ghanaian\u00a0government was the first in the continent to raise\u00a0<a href=\"https:\/\/www.african-markets.com\/en\/news\/west-africa\/ghana\/ghana-plans-to-issue-africa-s-first-social-bond-what-you-must-know\">$5 billion<\/a> from international capital through\u00a0<a href=\"https:\/\/www.worldbank.org\/en\/news\/press-release\/2022\/05\/27\/afw-green-social-and-sustainable-bonds-to-serve-africa-s-sustainable-investment-needs#:~:text=WEST%20AFRICA%2C%2026%20May%202022,issuers%20from%20across%20West%20Africa.\">Green, Social and Sustainability (GSS) Bonds<\/a>.\u00a0GSS bonds fund projects with supposed environmental and social outcomes. In May 2022, the World Bank\u00a0<a href=\"https:\/\/www.worldbank.org\/en\/news\/press-release\/2022\/05\/27\/afw-green-social-and-sustainable-bonds-to-serve-africa-s-sustainable-investment-needs#:~:text=WEST%20AFRICA%2C%2026%20May%202022,issuers%20from%20across%20West%20Africa.\">called<\/a> GSS bonds a \u201cnew frontier for Africa that will help the continent build a deeper, resilient, and sustainable financing, according to policymakers, regulators, and peer sovereign issuers from across West Africa.\u201d<\/p>\n<p dir=\"ltr\">But instead of the promised \u201cnew frontier,\u201d Ghana experienced high consumer inflation and higher cost of living which prompted protests in the capital, Accra. Earlier this year, Moody\u2019s\u00a0<a href=\"https:\/\/assets.website-files.com\/5df9172583d7eec04960799a\/627a63842127ead24222a2fb_BX12811_SF%20report%20draft%20-%205.9.2022.pdf\">warned<\/a> global sustainable bond issuance would be \u201cflat\u201d in response to Russia\u2019s invasion of Ukraine\u2014which is down 28% from Q1 2021. The Ghanaian government didn\u2019t do itself any favors after\u00a0<a href=\"https:\/\/www.bbc.com\/news\/world-africa-61248366\">imposing<\/a> a tax on electronic payments at the same time. Now the nation, on the brink of economic collapse, is in\u00a0<a href=\"https:\/\/www.aljazeera.com\/news\/2022\/7\/13\/ghana-inflation-scales-new-peak-at-29-8-in-june\">talks<\/a> with the International Monetary Fund (IMF) for a bailout.<\/p>\n<p dir=\"ltr\">The Netherlands, the European Union\u2019s\u00a0<a href=\"https:\/\/www.cbs.nl\/en-gb\/news\/2021\/25\/the-netherlands-is-the-eu-s-largest-meat-exporter\">largest meat exporter<\/a>, has also fallen prey to ESG policies. Scoring a\u00a0<a href=\"https:\/\/www.worldeconomics.com\/Country-Data\/Netherlands.aspx\">90.7 rating<\/a>, the Dutch government last year\u00a0<a href=\"https:\/\/www.theguardian.com\/environment\/2021\/dec\/15\/netherlands-announces-25bn-plan-to-radically-reduce-livestock-numbers\">approved<\/a> a 13-year $21 billion plan to\u00a0<a href=\"https:\/\/abcnews.go.com\/Business\/wireStory\/explainer-dutch-farmers-protesting-emissions-85848026\">cut<\/a> ammonia and nitrogen emissions 50% by 2030. The proposal also mandated the number of livestock be reduced by\u00a0<a href=\"https:\/\/www.france24.com\/en\/live-news\/20220622-dutch-farmers-protest-livestock-cuts-to-curb-nitrogen\">30%<\/a> to achieve this goal. That would be a disaster for the country\u2019s\u00a0<a href=\"https:\/\/www.dw.com\/en\/dutch-farmers-block-food-distribution-centers-over-new-environmental-rules\/a-62356217\">54,000<\/a> agribusinesses.\u00a0<\/p>\n<p dir=\"ltr\">Dutch farmers rightfully perceived this as an attack on their industry and livelihoods by organizing countrywide protests. Unsurprisingly, the Dutch government dismissed their concerns and\u00a0<a href=\"https:\/\/apnews.com\/article\/netherlands-wildlife-the-hague-a0809b0fb37e8923ac9184b86325d2e3\">confessed<\/a> their goal is to destroy industry jobs, noting, \u201cThe honest message &#8230; is that not all farmers can continue their business.\u201d\u00a0<\/p>\n<p dir=\"ltr\">It gets worse for the Netherlands. Last March, Holland\u00a0<a href=\"https:\/\/www.eurosif.org\/policies\/sfdr\/#:~:text=The%20Sustainable%20Finance%20Disclosure%20Regulation,made%20by%20financial%20market%20participants.\">adopted<\/a> a new continent-wide Sustainable Finance Disclosure Regulation (<a href=\"https:\/\/eur-lex.europa.eu\/legal-content\/EN\/TXT\/PDF\/?uri=CELEX:32019R2088&amp;from=EN\">SFDR<\/a>) to \u201cimprove transparency in the market for sustainable investment products, to prevent greenwashing and to increase transparency around sustainability claims made by financial market participants.\u201d\u00a0<\/p>\n<p dir=\"ltr\">While the European nation hasn\u2019t collapsed yet, the fertilizer reduction use plan may invite problems later since Dutch inflation rate now stands at\u00a0<a href=\"https:\/\/tradingeconomics.com\/netherlands\/inflation-cpi\">8.6<\/a>%\u2014one of the\u00a0<a href=\"https:\/\/www.iamexpat.nl\/expat-info\/dutch-expat-news\/cost-living-soars-dutch-food-prices-rise-over-11-percent\">highest<\/a> in Western Europe.\u00a0<\/p>\n<p dir=\"ltr\">Undoubtedly, Sri Lanka\u2019s dalliance with ESG has been a clarion call to the world. Following its<a href=\"https:\/\/www.reuters.com\/world\/asia-pacific\/sri-lanka-awaits-presidents-resignation-after-flight-2022-07-14\/\">\u00a0president\u2019s resignation<\/a>, the South Asian nation is basically on the verge of collapse.\u00a0<\/p>\n<p dir=\"ltr\">How did a country with a <a href=\"https:\/\/www.worldeconomics.com\/Country-Data\/Sri%20Lanka.aspx\">98.1<\/a> out of 100 \u201cE\u201d score end up like this? Naturally, the nation rushed to become the first 100% organic farming nation in the world. In April 2021, President Gotabaya Rajapaksa proposed the country ban chemical fertilizer use in farming\u2014a position he <a href=\"https:\/\/foreignpolicy.com\/2022\/03\/05\/sri-lanka-organic-farming-crisis\/\">ran<\/a> on during his 2019 presidential run. A group of 30 scientists <a href=\"https:\/\/www.ft.lk\/front-page\/Inorganic-fertiliser-ban-could-harm-production-with-major-implications\/44-719325\">warned<\/a> him not to proceed, citing concerns from potential product yield drops. After the fertilizer ban was adopted, the price of rice <a href=\"https:\/\/www.reuters.com\/markets\/commodities\/fertiliser-ban-decimates-sri-lankan-crops-government-popularity-ebbs-2022-03-03\/\">reportedly<\/a> surged 30%. By August, the country <a href=\"https:\/\/www.reuters.com\/world\/asia-pacific\/sri-lanka-declares-economic-emergency-contain-food-prices-amid-forex-crisis-2021-08-31\/\">plunged<\/a> into an economic crisis. When January rolled around, the country <a href=\"https:\/\/www.aljazeera.com\/news\/2022\/1\/26\/sri-lanka-200-million-compensation-farmers-organic-crops-drive#:~:text=News%7CAgriculture-,Sri%20Lanka%20to%20pay%20%24200m%20compensation%20for%20failed%20organic,farming%20nation%20will%20be%20compensated.\">pulled the plug\u00a0<\/a>and announced one million rice farmers would be compensated a sum total of $200 million following the botched implementation of the program. \u00a0<\/p>\n<p dir=\"ltr\">Sri Lanka was praised as a model ESG candidate for <a href=\"https:\/\/www.ey.com\/en_lk\/news\/2021\/11\/the-flipsides-of-esg-for-investor-and-stakeholder-relations\">committing<\/a> to carbon neutrality by 2050 and halving its nitrogen use. Today, it\u2019s experiencing <a href=\"https:\/\/www.reuters.com\/world\/asia-pacific\/how-sri-lanka-spiralled-into-crisis-2022-07-13\/\">54.6%<\/a> runaway inflation.<\/p>\n<p dir=\"ltr\">The aforementioned Ghana, the Netherlands, and Sri Lanka case studies prove ESG policies have ruinous effects on political stability, economic growth, and inflation rates. And these won\u2019t be the last countries with high scores to experience turmoil.<\/p>\n<p dir=\"ltr\">Canada, our neighbor to the north and holder of a\u00a0<a href=\"https:\/\/www.worldeconomics.com\/Country-Data\/Canada.aspx\">79.5 \u201cE\u201d score<\/a>, has similarly\u00a0<a href=\"https:\/\/torontosun.com\/news\/national\/trudeau-pushes-ahead-on-fertilizer-reduction-as-provinces-and-farmers-cry-foul\">proposed<\/a> gutting fertilizer use by 30%. Naturally, this isn\u2019t sitting well with Canadian farmers. And it shouldn\u2019t.\u00a0<\/p>\n<p dir=\"ltr\">Developing and developed nations need not rely on ESG metrics to measure success. Hinging economic performance on these subjective scores will incur harm and have no measurable positive impact on the environment.<\/p>\n<p dir=\"ltr\"><em>Gabriella Hoffman is a senior fellow at Independent Women\u2019s Forum and the host of the District of Conservation podcast. Follow her on Twitter at @Gabby_Hoffman.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>With the recent passage of the costly, yet deceptively named, Inflation Reduction Act in the Senate, the Environmental, Social, and Governance (ESG) movement will be further emboldened. The<\/p>\n","protected":false},"author":1,"featured_media":1618759,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1618757","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1618757","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1618757"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1618757\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1618759"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1618757"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1618757"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1618757"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}