As the world shifts to low-carbon technology, the demand for minerals and metals such as copper and lithium has grown exponentially. Unfortunately, this shift has the potential to undermine strategies intended to uphold environmental, social, and good governance principles. Many of these minerals and metals come from regions in which government structures are unstable and can increase conflict.

Adam Matthews, the chief responsible investment officer at the Church of England Pensions Board, noted the potential of this increased demand to inflame existing instability. His organization has formed an alliance, the Global Investor Commission on Mining 2030, in order to expose and fight the systemic risks stemming from this situation.

Paul Lee, head of stewardship and sustainable investment strategy at Redington, announced his concern over too much concentration on ESG. This over-focus has the potential to get in the way of good investing. Though refusing to single out any specific companies, Matthews went on to state

Republican legislators from Texas and Iowa have expressed their anger and concern over asset management firms and their commitment to social and environmental causes, dubbing it wokery and a PC agenda. In an effort to prevent further boycotting of the gun, fossil fuel and other industries, Senate Bill 13 in Texas and Senate Study Bill 1094 in Iowa have been proposed. These bills would limit opportunities for asset managers to incorporate “environmental, social and governance factors” into their investment decisions, instead forcing them to make investment decisions solely aimed at maximizing returns and profitability.

The Governor’s Office of the Lone Star state has expressed that the ESG practices are legally and financially concerning, citing that “Public officials are responsible for investing billions of dollars in retirement funds, pension funds, and other investment vehicles. Those hard-earned dollars must not be sacrificed to advance progressive social causes, like green energy or gun control at all costs.”