The ‘S’ in ESG is becoming increasingly controversial for Latin American companies

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(Michael Molinski is a senior economist at Trendline Economics. He’s worked for Fidelity, Charles Schwab and Wells Fargo, and previously as a foreign correspondent and editor for Bloomberg News and MarketWatch.)

SÃO PAULO, Brazil (Callaway Climate Insights) — The S, or Social pillar, within ESG is becoming an increasingly dangerous and controversial issue for Latin American companies and governments as they react to the U.S. and Europe’s threats to issue sanctions against companies that use slave labor.

As of now, no sanctions have affected Latin American companies, but the writing is on the wall in the wake of U.S. sanctions on goods from the Xinjiang region of China and proposed legislation from the European Union that would ban products made with forced labor.

All of this comes in the midst of a backlash against ESG investments, criticizing  ESG for not being properly measured and only serving to line the pockets of ESG investors…

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