Employers should go beyond what has become common environmental, social, and governance (ESG) practices or even just completely move on from the idea, according to experts at the Fraser Institute.
While the idea behind ESG is to be of help to the community, it can actually be detrimental to people’s lives, say Fraser Institute expert Jack Mintz, president’s fellow, School of Public Policy, University of Calgary; and Bryce Tingle, N. Murray Edwards Chair in Business Law, University of Calgary.
“Basic economic theory suggests that higher costs associated with ESG will result in a reduction of output, a rise in market prices, a fall in economic rents, and lower share prices. In other words, the firm will be unable to cover its cost of capital,” they say.
