ESG is Not Libertarian: A Response to Jonathan Macey

Authors

Allen Mendenhall
Daniel Sutter

Abstract

Investing, like any market activity, is voluntary. Investors may invest however they wish, whether to maximize returns, minimize risk, or support what they view as good causes. Is the current Environmental, Social and Governance (ESG) movement a libertarian embrace of socially responsible investing, as Jonathan Macey has argued? We answer with a definite no for several reasons. Government policies impel much ESG investment, most prominently through clean energy transition and financial regulations. Most ESG investment dollars stem not from investor decisions but from potential opportunism by managers of public pensions and sovereign wealth funds. Much investor activism for ESG results from shares owned indirectly by passive investors and may also reflect opportunism. Even the modest goal of harmonizing the dozens of different private ESG metrics through regulation violates market autonomy. We conclude, contra Macey, that ESG is not libertarian.

Recommended Citation

Allen Mendenhall & Daniel Sutter, ESG is Not Libertarian: A Response to Jonathan Macey, 12 Emory Corp. Governance & Accountability Rev. 1 (2026).
Available at: https://scholarlycommons.law.emory.edu/ecgar/vol12/iss1/1