American companies face increasing pressure from activist investors to pursue more noble purposes than profit. In response to this clamor, virtue-signaling by corporations has run amok. Starbucks is the poster-child for self-styled sustainable companies, issuing $500 million in “green” bonds and pledging a “commitment to create global social impact.”
The coffee conglomerate announced earlier this month it will phase out plastic straws after caving to pressure from environmentalists. Nevermind that Starbucks, by ditching straws in favor of plastic “nitro” lids, will almost certainly increase its use of plastics by volume. Moreover, the Associated Press reported that plastic straws account for just 0.02 percent of plastic waste estimated to litter oceans each year. Starbucks’ decision to go suckless received fawning coverage in media outlets, many of which cited a debunked “study” by a then-9-year-old claiming that Americans use more than 500 million straws per day to justify the initiative.
This policy will have a negligible, or perhaps negative, environmental impact while imposing real costs on Starbucks as a profit-generating enterprise. This example illustrates one of the most challenging aspects of Environmental, Social and Governance (ESG) investing: How can a company’s social responsibility be accurately and fairly measured for investors?
Read the full piece at the Washington Examiner: