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: Suggested Citation