In his recent column, George Will asserted that neither action to curb climate change or any other pursuit of the common good should be imposed on “capitalist” investment decisions. It’s important to note that this debate hinges on interpreting fiduciary law that Will cites in this column:
Financial managers must serve “the exclusive purpose of providing benefits” to the investors. The question is, what should be included among those benefits? The performance of money-managers is typically rewarded on the basis of short-term returns that ignore external and longer-term consequences. According to Will, when they fail to acknowledge the urgency of climate change and its causes, these managers have the legal obligation to ignore it. Consequently, by his reasoning, those outside “stakeholders” who insist on addressing climate hazards through investment strategies are “parasitic” progressives.
At this stage in scientific understanding of the causes of global climate perils, there can be no allowance for ignoring such evidence in making decisions affecting the future. Surely fiduciary legal obligations under these circumstances require investment managers to carefully consider the facts about climate change when advising investors. After all, like everyone else, stockholders are inherently “stakeholders” in Earth’s livability, and the value of their portfolio will not protect them from unsurvivable conditions, made even worse and occurring sooner due to willfully negligent investing.
Will’s position propagates the reputation of capitalism for being dangerously opportunistic. By ignoring its rapidly accumulating environmental damages and legally defending such ignorance, he is ultimately endangering both Wall Street and Main Street.
David Kyler, Center for a Sustainable Coast. Saint Simons Island