Environmental, Social, and Governance Theory: Defusing a Major Threat to Shareholder Rights

110 Pages Posted: 14 May 2021

Date Written: May 5, 2021

Abstract

In recent years environmental, social, and governance (ESG) theory has become increasingly influential in the world of corporate management and investing. Despite significant problems with inconsistent definitions and controversial policies, many proponents, including members of Congress and the Biden administration, are suggesting that ESG goals be mandated via government enforcement. Such mandates would constitute a major threat to the property, due process, and association rights of investors, but can be avoided if policy makers embrace a voluntary system of “benefit corporation” charters, augmented by private certification standards.

Keywords: ESG, CSR, SRI, investing, finance, corporate governance, property rights, capitalism, economic theory

JEL Classification: G38, H32, N3, N4, K22

Suggested Citation

Morrison, Richard, Environmental, Social, and Governance Theory: Defusing a Major Threat to Shareholder Rights (May 5, 2021). Available at SSRN: https://ssrn.com/abstract=3845709 or http://dx.doi.org/10.2139/ssrn.3845709

Richard Morrison (Contact Author)

Competitive Enterprise Institute ( email )

1310 L Street NW
7th floor
Washington, DC 20005
United States
202-331-1010 (Phone)

HOME PAGE: http://cei.org/experts/richard-morrison

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