Mr. Boslego, you highlight well key pros and cons of applying ESG filters in investing decision-making to optimize portfolio performance in the short, middle and long term via capital allocation and cash flow. Presenting both sides of ESG investing in the context of DOL’s decision based on a fiduciary rationale is good for purposes of defining and clarifying what ESG investing is and its apparent, emerging limitations (paradox? Am not clear on this based on your reasoning) given its historical policy and regulatory framework.

On the other hand, given all the downsides of using ESG screens (such as confusing it with socially responsible investing, existing conflicting definitions by practitioners , selecting the appropriate ESG indicators, challenging risk management scenarios and modeling, using classical investment theory, measuring and reporting correctly and timely social and environmental impacts , etc.), the ESG approach remains as the only viable and gradual, and admittedly incremental acceptance, in measuring and holding accountable U.S. corporate and institutional investors of their responsibility to society to do good while monetizing the externalities of our market-based economic system in an equitable and inclusive manner by maximizing stakeholder value. Note: Dr. Friedman’s view and work aimed at maximizing stockholder value as being the sole purpose of an enterprise is out of date and was only relevant for a short period of time when communism and socialism were the 800 lb gorilla in the room and inclusiveness, diversity and equity were but words in our lips instead of embedded in our group and individual psychological DNA as national, existential imperative.

Here is an idea: Perhaps there should be an ESG Exchange which would include socially responsible companies, opportunity zone funds, investment firms offering ESG themes, equity/debt impact funds focusing on any or all of the E, S and Gs, e.g., Blackrock and securities houses offering green bonds. The Exchange would also include B companies, sustainable enterprises and others that offer services and products aimed at reducing social, environmental and governance gaps in the U.S. to begin with. Incidentally, I would add to the ESG another “E” at the beginning as such …or EESG…. so that it is clear that economic impact such job creation/retention, household incomes and net worth, business startups, community investing/lending etc. are addressed. Example: Long Term Exchange and/or the option of creating exchanges based on ethnicity, cast, gender/preference, etc. is the way to go such as the Dream Exchange.

Bottom line: We must begin to think and do out of the box NOW. New investment paradigms need to be created to reach the goal of accelerating the presence of institutional justice culture and an economically equitable society. Is ESG the only vehicle to get there? Definitely not! However, for now, that is all we have until ESG becomes a well-established, non-correlated investment class from its present $34T to over $100T by 2025 instead of within the next 10 years!