SVB collapse Shows ESG Is a counterproductive, virtue-signaling scam

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by Chris Talgo at

If there is one giant takeaway from the sudden collapse of Silicon Valley Bank (SVB), it is that Environmental, Social, and Governance (ESG) scores are utterly pointless in assessing the health and vitality of a major financial institution. On the other hand, as the SVB saga demonstrates in spades, ESG scores are extremely helpful in determining whether or not a bank is likely to receive a government bailout when it goes belly up because it was fanatical with its fidelity to the ESG cult instead of making sound financial investment decisions.

Incredibly, the now insolvent SVB, which held $200 billion in net assets not that long ago, remains in very good standing when it comes to its ESG score. As the record shows, to this day, SVB is still in the good graces of the ESG crowd. In fact, all three of the big ESG ratings agencies still give SVB a solid ESG score despite its pending bankruptcy.

So, how did SVB attain such a stellar ESG score while it was making terrible risk-assessment decisions and putting its clients’ funds in peril? The answer is simple: SVB played the ESG game like an old pro.

Consider. According to its 2022 ESG report, SVB has devoted a mountain of its (limited) resources solely towards ESG implementation. For example, SVB touts that it has an ESG Executive Committee, ESG Program Office, ESG Advisory Committee, and eight ESG Working Groups, which includes the “Climate Risk Working Group,” “Operational Climate Working Group,” “ESG Communications and Disclosures Working Group,” “DEI Governance Working Group,” and the “Green Team.”

SVB’s president and CEO, Greg Becker, has also gone to great lengths in recent years to pat himself on the back regarding his firm’s allegiance to ESG. As Becker recently wrote, “Our values guide everything we do. We start with empathy, take responsibility, speak and act with integrity, embrace diverse perspectives, and keep learning and improving. These values inform our business decisions, determine how we support and reward our employees, shape our relationships with our clients and communities, and help drive our progress toward our ESG priorities.”

Is it just me or does it seem strange that a bank, which one would assume would be mostly concerned with asset allocations, risk calculations, and macroeconomic trends, seems to be utterly obsessed with championing itself as a vessel for social justice?

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