Stupidity dressed as sanctimony
Virtual virtue meets real-world failure
“Insanity: doing the same thing over and over again and expecting different results.”
—Misattributed to Albert Einstein1
Environmental, Social, and Governance (ESG) investing has captured the imagination of asset managers, institutional investors, and a wave of well-meaning individuals in the 2010s who believed their capital could help “make the world a better place.” But scratch beneath the glossy surface of ESG narratives, and you’ll find an edifice built on contradictions, inefficiencies, and a glaring disconnect from reality. ESG investing is not just misguided — it’s idiotic.
“ESG is beyond redemption, testimony to the consequences of letting good intentions overwhelm good sense and allowing the selling imperative to define and drive mission. May it RIP.”
—Aswath Damodaran, FT, 26 October 2023
I believe the theme peaked in 2022, when the misallocation of capital in the energy sector became apparent to almost everyone. Most recently, the almost Ceaușescu-like toppling of ESG’s most prominent cheerleader, Klaus Schwab, and the blackouts in Europe could accelerate its decline.
Writing in a book titled The Plague:
“The evil that is in the world always comes of ignorance, and good intentions may do as much harm as malevolence, if they lack understanding.”
—Albert Camus (1913-1960), French philosopher, author and journalist2
At its core, ESG investing is virtual investing. It prioritises optics over outcomes, feelings over facts, and perception over performance. The idea that you can generate competitive returns while saving the planet and solving social problems with checklists and rating systems is seductive — but ultimately untrue. ESG portfolios are increasingly driven by compliance metrics, arbitrary scores, and popular sentiment rather than sound economics or long-term utility.
When fighting physics, physics wins. Virtual investing in a nutshell:
What happens when you allocate billions to virtue instead of value? Misallocation of capital on a global scale. Capital flows into trendy, overhyped sectors, such as solar and fake food startups with no path to profitability, while critical industries that secure the foundations of civilisation are stripped of capital. The Spanish and Portuguese just had a first glimpse of it this week. Their grid went to net zero.
Nothing reveals the flaw in ESG logic more than its disdain for defence, a put option for a democracy’s freedom, often costing around 2% of GDP per year. In the name of peace and goodwill, ESG frameworks usually exclude weapons manufacturers and defence contractors, labelling them as morally unacceptable. But without adequate national defence, there is no peace, no security, no human and property rights, and ultimately no free market in which to invest at all. Europe’s energy and security crises — following years of ESG-led divestment from fossil fuels and defence — are case studies in the cost of idiocy.
“The top six [US] states with clean energy are powered primarily by nuclear or hydropower.
Not solar or wind.
Whether they know it or not, when ‘environmentalists’ advocate against hydropower and nuclear, they advocate for INCREASING fossil fuels.”
—Benji Backer, @BenjiBacker, X, 17 April 2023, edits in original
The most damning critique of ESG, and net zero, it’s top-down bretheren, is not simply that it’s ineffective — it’s that it’s internally incoherent.
“Why oil bosses say BP stands for banana peel.”
—FT page 1 title, 22 April 2025
Consider energy. Environmental virtue signalers proudly oppose fossil fuels and demand clean alternatives. And yet, they also oppose nuclear energy — the cleanest, most scalable, and most efficient zero-emission energy source available today. Why? Because nuclear doesn’t fit the emotion-driven ESG/net zero narrative. It doesn’t photograph well. It requires adult-level risk assessment and long-term thinking — qualities ESG/net zero discourse sorely lacks.
Quick eye test: Can you spot Elon Musk in the following cartoon?
Or take electric vehicles (EVs). They are, or were, the darling of ESG/WEF ideology, marketed as the sustainable transport solution of the future. But how do you build EVs without mining? Lithium, cobalt, rare earths — these are extracted through intensive mining operations, often in ecologically sensitive or politically unstable regions. Yet the Greta-inspired good-doers also champion anti-mining sentiment. This contradiction is more than hypocrisy — it’s stupidity dressed as sanctimony.
“Fretting about overpopulation, is a perfect guilt-free—indeed, sanctimonious—way for "progressives" to be racists.”
—P. J. O'Rourke (1947-2022), American political satirist and journalist3
When fighting economics, economics wins. Corporate sanctimony in a nutshell:
Markets allocate capital best when prices reflect risks, rewards, and needs, not when they are bent to fit political agendas or public relations campaigns. ESG introduces inefficiencies at every turn. It distorts valuations, encourages box-checking over innovation, and leads to shallow, PR-driven decisions that fail under pressure. It brings down serious climate-related problem-solving to the infantile Fridays for Future level. It’s a system where appearing virtuous is more important than being effective — a parody of capitalism dressed up as progress.
"Get Woke, Go Broke: BlackRock Stock Downgraded Over Risk From ESG Investing"
—Article title by Ben Zeisloft, dailywire.com, 18 October 2022
[Your author’s comment at the time: This is consistent with the idea that peak ESG is behind us and also with the idea that there are risks for investors and corporates who drank too much of the ESG/net zero/WEF/IPCC/COP kool-aid.]
ESG investing is idiocy in a tailored suit. It is a road paved with good intentions, but riddled with contradictions and blind to life's realities. It misallocates capital, ignores critical industries, and undermines the very goals it claims to support. The planet doesn’t need more virtue-signalling investors — it needs rational, fact-based capital allocation.
Trivia (15 Jan 2024):
Variously attributed also to Benjamin Franklin and Mark Twain. The earliest known occurrence, and probable origin, is from a 1981 text from Narcotics Anonymous: "Insanity is repeating the same mistakes and expecting different results." From wikiquote.org, 3 January 2017. Sources commonly attribute the quote to Einstein in his "Letters to Solovine: 1906-1955," although no one seems to be able to produce a page from that volume that holds the quote. An earlier version of the quote came from author Rita Mae Brown’s novel "Sudden Death," published by Bantam in 1983. In the novel, Brown writes: "Unfortunately, Susan didn’t remember what Jane Fulton once said. 'Insanity is doing the same thing over and over again, but expecting different results.'” One variant was published in a Hazelden Foundation pamphlet in 1980: "Insanity is repeating the same mistakes and expecting different results." From Becker's Online Journal, 3 January 2017.
The Plague (1947).
P. J. O’Rourke, All the Trouble in the World (New York: Atlantic Monthly Press, 1994).