ANN ARBOR, Mich. (Michigan News Source) – A nationwide debate over whether partisan politics should influence investment in a business or company has now become a teaching point for academia.
Both the University of Michigan and Michigan State University offer classes for its Master’s programs on the controversial policy known as Environmental Social and Governance (ESG).
What is ESG?
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The University of Michigan stated that its ESG curriculum added this year would “confidently navigate a rapidly changing business world with strong foundations in sustainability, social impact, and ethical leadership.”
However, the conservative think tank The Heritage Foundation claims that ESG would impose woke values on businesses.
The Heritage Foundation described ESG as a “woke credit score” where if a place of business didn’t score high enough it could be “cancelled.”
Risky business.
Business loans could be denied to a company if banks and investors didn’t agree with its social policies. Companies that didn’t have what was considered to be “appropriate” social justice policies such as giving employees paid time off for abortions could hurt their ability to get financing, according to The Heritage Foundation.
“Modern businesses need leaders prepared to transform how enterprises engage with the natural environment and climate change, address the needs of a changing workforce, and provide increased accountability to investors and other stakeholders,” the University of Michigan stated about its ESG program.
What other institutions offer ESG programs?
Michigan and Michigan State are not the only colleges to offer ESG programs. Fordham University, a Catholic university in New York City, has a student-managed investment fund that includes an ESG fund. Students are allowed to manage the portfolio in a “sustainable way,” according to Fordham.
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Michigan Attorney General Dana Nessel signed a letter with 20 other AGs in March 2023 supporting a U.S. Department of Labor that fiduciaries of private-sector employee retirement plans like 401(k) plans can consider ESG factors when making investment decisions.
In August 2022, the Texas Attorney General joined 18 other states in challenging the ESG policies used by BlackRock, the world’s largest asset manager. The letter implied that BlackRock risks losing state pension system assets if it used ESG policies.
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