Poor ESG: Regressive Effects of Climate Stewardship

Authors

• Zohar Goshen
• Assaf Hamdani
• Alex Raskolnikov

Abstract

The rise of inequality and global warming are the two ultimate challenges of our time. After decades of congressional failure to address climate change, the private sector has stepped in and adopted a set of environmental, social, and governance (ESG) policies as a market-based solution to a public policy failure. ESG advocates hope that corporate executives would save our planet. Where Congress failed, ESG will succeed.

This Article argues that if ESG-driven climate stewardship ever achieves the scale necessary to have a real impact on global warming, it will hurt the poor. Legislative interventions to combat climate change are nearly always regressive, impacting those with the least, the most. ESG implemented at scale will inevitably replicate the regressive effects of these interventions on which all ESG carbon-reduction strategies are based. But, in contrast with congressional action, ESG solutions will not raise any revenue that could be used to offset ESG regressivity. ESG solutions may appear attractive because they seem to avoid the contentious politics of redistribution. But as the backlash against ESG vividly demonstrates, opponents will seize every opportunity to remind voters—especially middle- and low-income voters—of the job losses and increased energy costs that will follow ESG policies aimed at curbing carbon emissions. One possible response to these concerns would be legislation that offsets the regressive impact of ESG. That is, while ESG would protect the planet, Congress would protect the poor. However, as this Article will demonstrate, Congress will be unable to address the regressive implications of the varied and opaque ESG policies adopted by thousands of corporations. Furthermore, Congress will not have strong incentives to do so.

We conclude that ESG-driven climate stewardship is a poor solution to global warming because the poor will pay the price. There is no alternative to legislation in tackling both global warming and economic inequality. Institutional investors may nudge this legislation forward by ensuring that the lobbying

efforts of their portfolio companies are aligned with the companies’ pledges to protect the environment.

Rights

2026 Brigham Young University Law Review

Recommended Citation

Zohar Goshen, Assaf Hamdani, and Alex Raskolnikov, Poor ESG: Regressive Effects of Climate Stewardship, 51 BYU L. Rev. 1039 (2026).
Available at: https://digitalcommons.law.byu.edu/lawreview/vol51/iss4/8