Critics blame ESG for Silicon Valley Bank failure (2023)
| Environmental, social, and corporate governance |
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| • What is ESG? • Enacted ESG legislation • Arguments for and against ESG • Opposition to ESG • Federal ESG rules • ESG legislation tracker • Economy and Society: Ballotpedia's weekly ESG newsletter |
California regulators shut down Silicon Valley Bank (SVB) on March 10, making it the second-largest bank failure in American history. In the wake of the collapse and the fear of contagion, some in politics and the media have criticized the bank’s loans to ESG-related companies and its in-house ESG policies. For example, Congressman James Comer (R-Ky.), the chairman of the House Oversight Committee, said SVB was “one of the most woke banks” in America:
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GOP Rep. James Comer, the chairman of the House Oversight Committee, slammed Silicon Valley Bank, or SVB, as "one of the most woke banks" in the US. "We see now coming out they were one of the most woke banks in their quest for the ESG-type policy and investing," Comer said, referring to environmental, social, and governance policies. "This could be a trend and there are consequences for bad Democrat policy," the Kentucky congressman continued on Sunday's episode of Fox News' "Sunday Morning Futures." Comer did not explain which environmental sustainability-linked investments would have caused SVB's failure, or how they would have done so.[1] |
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The New York Post ran a piece on March 11 detailing some of the ESG programs in which the bank participated:
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A head of risk management at Silicon Valley Bank spent considerable time spearheading multiple “woke” LGBTQ+ programs, including a “safe space” for coming-out stories, as the firm raced toward collapse. Jay Ersapah, the boss of financial risk management at SVB’s UK branch, launched initiatives such as the company’s first month-long Pride campaign and a new blog emphasizing mental health awareness for LGBTQ+ youth. “The phrase ‘You can’t be what you can’t see’ resonates with me,’” Ersapah was quoted as saying on the company website. … In addition to instituting SVB’s first “safe space catch-up” — which encouraged employees to share their coming-out stories — and serving on LGBTQ+ panels around the world, Ersapah spent time over the last year serving as a director for diversity role models and volunteering as a mentor for migrant leaders. … On Saturday, Home Depot co-founder Bernie Marcus insinuated that “woke” policies like the ones launched by Ersapah could have led to SVB’s dramatic failure. … “These banks are badly run because everybody is focused on diversity and all of the woke issues and not concentrating on the one thing they should, which is, shareholder returns,” Marcus said. “Instead of protecting the shareholders and their employees, they are more concerned about the social policies. And I think it’s probably a badly run bank. “They’ve been there for a lot of years. It’s pathetic that so many people lost money that won’t get it back.”[1] |
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See also
- Environmental, social, and corporate governance (ESG)
- Economy and Society: Ballotpedia's ESG newsletter
External links
Footnotes
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