Last year, it came to light that Morningstar, one of America’s leading investment-research firms, was systematically issuing corporations that do business with Israel low “environmental, social, and governance” (ESG) ratings. These ratings have significant economic outcomes, as they are used by the sizable number of investors who want to feel that they are employing their money ethically. Yet, despite complaints from Jewish organizations, and investigations in several states for possible violations of anti-BDS laws, Morningstar has done little to change its practices.

In two essays on the topic, Samuel Gregg argues that the entire focus on ESG is deeply flawed, failing even by its own questionable metrics. If so, perhaps Morningstar’s anti-Israel obsessions are mere symptoms of a perverse system:

One of ESG’s many difficulties . . . is that its goals and methods are characterized by an incoherence sufficient to call into question not just specific features of ESG but the conceptual integrity of the entire ESG endeavor. Another ESG problem is its tendency to blur ethics and sound business practices with the promotion of particular political causes. This mindset has spilled over into the outlook of financial regulators, and consequently threatens to facilitate widespread dysfunctionality in these agencies’ operations. Lastly, the adoption of ESG risks corroding understanding of the nature and proper ends of commercial enterprises—a development that has broader and negative implications for society as a whole.

Based on a large sampling of Morningstar-identified American ESG mutual funds from 2010 to 2018, [one major study] determined “that these funds hold portfolio firms with worse track records for compliance with labor and environmental laws, relative to portfolio firms held by non-ESG funds managed by the same financial institutions in the same years.” As if that is not enough, [the researchers] conclude that “ESG funds appear to underperform financially relative to other funds within the same asset manager and year, and to charge higher fees.” In short, not only have such funds failed to deliver on many of their ESG goals; they also cost more and provide less by way of financial return.

If the content of ESG is 1) unstable or effectively amounts to whatever you want it to be or whatever happens to be the cause célèbre at a given moment, and 2) there’s no universally agreed-upon measure of success, then whatever claim ESG has to coherence and universal applicability starts to look very thin indeed.

Addressing a recent meeting of the Palestine Liberation Organization’s Central Committee, Mahmoud Abbas criticized Hamas more sharply than he has previously (at least in public), calling them “sons of dogs.” The eighty-nine-year-old Palestinian Authority president urged the terrorist group to “stop the war of extermination in Gaza” and “hand over the American hostages.” The editors of the New York Sun comment:

Mr. Abbas has long been at odds with Hamas, which violently ousted his Fatah party from Gaza in 2007. The tone of today’s outburst, though, is new. Comparing rivals to canines, which Arabs consider dirty, is startling. Its motivation, though, was unrelated to the plight of the 59 remaining hostages, including 23 living ones. Instead, it was an attempt to use an opportune moment for reviving Abbas’s receding clout.

[W]hile Hamas’s popularity among Palestinians soared after its orgy of killing on October 7, 2023, it is now sinking. The terrorists are hoarding Gaza aid caches that Israel declines to replenish. As the war drags on, anti-Hamas protests rage across the Strip. Polls show that Hamas’s previously elevated support among West Bank Arabs is also down. Striking the iron while it’s hot, Abbas apparently longs to retake center stage. Can he?

Diminishing support for Hamas is yet to match the contempt Arabs feel toward Abbas himself. Hamas considers him irrelevant for what it calls “the resistance.”

[Meanwhile], Abbas is yet to condemn Hamas’s October 7 massacre. His recent announcement of ending alms for terror is a ruse.

Abbas, it’s worth noting, hasn’t saved all his epithets for Hamas. He also twice said of the Americans, “may their fathers be cursed.” Of course, after a long career of anti-Semitic incitement, Abbas can’t be expected to have a moral awakening. Nor is there much incentive for him to fake one. But, like the protests in Gaza, Abbas’s recent diatribe is a sign that Hamas is perceived as weak and that its stock is sinking.