Discussing Impact Investing and ESG's with a BlackRock Executive | Terrence Keeley | EP 410

Hello everyone. I'm pleased to announce my new tour for 2024, beginning in early February and running through June. Tammy and I, along with an assortment of special guests, are going to visit 51 cities in the US. You can find out more information about this on my website, jordanbpeterson.com, as well as accessing all relevant ticketing information. I'm going to use the tour to walk through some of the ideas I've been working on in my forthcoming book out November 2024, "We Who Wrestle With God." I'm looking forward to this! I'm thrilled to be able to do it again, and I'll be pleased to see all of you again soon. Bye-bye.

We have to worry about our air, land, and water for sure. 10 billion people on the planet—there were 1 billion in 1800, 2 billion in 1900, 4 billion in 1985, 8 billion in 2022, and we will peak out at 10 billion by 2073 according to the UN. We've never had that circumstance before, Jordan. We're going to have to find ways to live differently, more inclusively, and more sustainably while we continue to [Music] grow.

Hello everyone. Today I have the privilege of talking to Mr. Terrence Keeley. Terry was a speaker at the recent ARK conference in London in the business stream. He's an expert on so-called ESG investing, of which he is quite skeptical—perhaps the world's most foremost skeptic. All things considered, we talked about the idea of ethical investing—exactly what that means, the perils, pitfalls, and promises of pursuing so-called ethical investing strategies, uh, investment strategies. We talked about the necessity of formulating a positive vision for the future, financial and otherwise, and delved into the details of the 2008 financial crisis and the role played in that by the blindness, willful and otherwise, of people who were responsible for managing the world's money.

Welcome to the discussion. So, Terry, let's start this out with I'd like to ask you some questions about your experience at ARK. Maybe you could tell everybody watching and listening what you experienced there and what the consequences for you generally were with regard to the conference as a whole before we turn our attention to the specific topics that you addressed in the panel that you participated in in London.

Well, as you remember, Jordan, we met just this summer at Heather Higgins’ home, and we ended up having a very interesting conversation on the role of business and finance in fashioning a better world. And, uh, you kindly extended an invitation to me to be part of an ESG panel. But what I didn't realize in accepting that invitation, it was that I was going to be in the company of 1,500 wonderful people from, how many? 60 countries? I can't remember. 70? 72 countries? 72 countries, uh, with a very like mind. And that is, how can we tell a better story, uh, and get humanity on a better path for the very severe challenges that lie in the decades ahead?

I have to say, uh, you know, through you and to all of the other organizers, I just have a profound sense of gratitude. Um, I felt frankly like I was coming home. I live in a world where I have to be more careful with you about your pronouns, and you have to be with me about my religious beliefs. And yet I found in London, uh, that I was with many like-minded people who share a reverence for God and a reverence for humanity and a great desire to keep the planet on the right path—a sustainable path, but a path of growth and greater inclusivity. Um, and the way you, and Philippa, and others brought together the themes of art, music, poetry, religion, uh, as well as business themes, uh, political themes, it was just a huge privilege for me, uh, in many ways.

I don't know what the status is for many of your listeners, but it's difficult to be a conservative in America today. You don't really have a political party, you don't really have a common home to go to. And at ARK in London, I felt I was with a global community of like believers, Jordan, and I came through very, very hopeful. Two weeks earlier, I had been at Mitt Romney's E2 conference. I don't know if you know, but Mitt Romney sponsors an annual event in Park City. E2 stands for enthusiasts and experts. I felt similarly there that, you know, again, men and women of faith who have a very deep concern for humanity, a very deep concern for the trajectory that we're on, but have solutions and ideas for a better way forward for, as I wrote in that article for Real Clear Politics, a better story.

Maybe I can share a very personal story already, which is that my niece, who went to Stanford and graduated with a 4.0, is one of many thousands, if not to say hundreds of thousands, of individuals who are in their mid-20s who don't want to have children. Jordan, they don't want to have children. See, how could you imagine bringing children into a world when, on January 1st, 2050, the whole world's going to blow up because of climate change? How could we be so thoughtless?

And so, to have a clear narrative, a much better narrative about how our future is not disastrous—our future is up to us. We're going to get the globe that we deserve, and quite candidly, with greater mindfulness, it's going to be the greatest possible human achievement ever. And so that's how I felt coming out of London and how I felt with the great program that you and your colleagues put together.

Do you think this takes us off our topic a bit? But I'm going to go there anyways. I mean, you stressed two things that struck you when you were at the ARK conference, and that was that you were surrounded by people of faith, and you could read that religiously to some degree, but you could also read it as being surrounded by people who are willing to have the courage to put forward a positive vision of the future. You see, that's a form of faith too. And it's very important for people who are watching and listening to understand that you can't take a step into the future without faith, because you can't predict with anything approximating certainty what's going to happen as you move forward.

And so you have to adopt an attitude, a priority that sees you through regardless of what happens. And you can adopt an attitude of corrosive cynicism and bitterness and pessimism and defend yourself that way. And there are times when that's appropriate, but as a general stance towards the world, it tends to be counterproductive. And it's also the case that what a fragmented or misplaced faith, religious faith even tends to seem to have as a consequence, the development of something like an anti-human stance as things that aren't human, like nature itself, become worshipped, instead of what's properly put first and foremost.

And there is a remarkable concordance, I would say, between the religious belief that each person is a divine locus of being, let's say, and made in the image of God, and a pro-human stance. And one of the things that's really terrified me about the environmentalist movement, which purports to be about the sanctity and security of the planet, is easily transformed into something that is clearly anti-human. Like I've watched in absolute open-mouthed amazement over the last 10 years as the greens and the radical leftists, when push comes to shove, immediately demonstrate their willingness to sacrifice the poor to their planetary salvation delusions.

And it's so interesting because, in principle, the left has been the party that puts forward the demand for compassion towards the marginalized and the oppressed, economically and otherwise. But, man, when you stack up the oppressed and marginalized against the hypothetical interests of the planet as such, the lefties will sacrifice the poor in the blink of an eye. And they do that not least with their insistence that energy costs have to skyrocket, and consumption come down, which to me is tantamount to saying when consumption comes down, the poor starve. That's a necessary consequence of decreased consumption, and anyone who thinks otherwise is either willfully blind or ignorant beyond any, what would you say? Any morally acceptable degree.

So, all right, let me take a moment to respond to that, though, Jordan, because it's absolutely clear that everyone implicitly or explicitly has a religious belief. For some people, the religious belief is that there is no religious belief, but that then becomes its own religion. That is to say, some form of massive moral relativism becomes what, in fact, what they worship. I stood in awe of you speaking on the stage a couple of times about Jacob's ladder in the Book of Job.

And you know, Jordan, what's fascinating about you—and I know this is your podcast—but priests cannot put people in pews, and yet you can fill the O2 Arena with tens of thousands of young men to talk about the Book of Job and talk about Jacob's ladder and talk about the uphill struggle as being the moral struggle of our times. I just congratulate you and your colleagues, and I know you give a lot of credit to those around you as well, for just being able, Jordan, to enunciate this message in a way where it resonates to those who are genuinely lost, to those who are genuinely looking for a roadmap of how to have a better and more productive life.

And I want to establish early on this call I'm not a climate denier. I do believe that there are human influences that are very much putting our land, our air, and our water at risk. By the way, the planet has never had 8 billion inhabitants before. We're about to be 10 billion inhabitants. We're going to have to find ways to behave much more sustainably. But I was looking through my book of notes from the ARK conference, and one of the things that I wrote down is, it's not the climate deniers; it's the trade-off deniers.

And even in "Laudato Si," in the papal encyclical written by Pope Francis on the climate crisis, he is very clear, Jordan, very clear, that there are trade-offs. That we need to have more prosperity—there are too many people that are left behind. The vast majority of human beings still use less electricity than one refrigerator uses in a year in the West. We need to find ways to improve access, improve availability, improve abundance.

And we just finished this COP28 conference this morning, as you know, and you know, they've come off and finally been able to say, "let's do—let's phase out fossil fuels." But they're very quick, right? They're very quick to add that this must be done in a just way. Well, if it's done in a just way, the only way we're going to be able to get ourselves off of fossil fuels is by massively increasing nuclear, by massively increasing some other sources, and that is not plausible from now to 2050. We are simply going to be continuing to utilize this mix of fossil fuels, uh, that we're dependent on for reasons of justice, for reasons of human need, for reasons of human necessity.

And, as you pointed out and others at the conference, if you look around the globe, the wealthiest countries are the ones that actually have the cleanest energy mix. So we must prioritize continued economic growth. This is the mantra that I come to in my book repeatedly. Yes, we need more economic growth, but it needs to be more inclusive and it does need to be more sustainable. And I am a member of the church that says let's optimize between these various trade-offs—growth and cleanliness and sustainability. There are trade-offs, and we're going to have to navigate them. It's multivariable calculus; it's not as easy as the only thing that matters is net zero by 2050. It's not the only thing that matters; many things matter.

Well, that only-thing-that-matters narrative, I've been thinking that through in some detail. And so, part of what we're facing on the pathological culture war front is oversimplification that occurs for two reasons. And the first reason is purely factual—that there are human effects on the environment, some of which are deleterious. I was struck most particularly when investigating such effects on the effects of unrestricted coastal fishing on fish stocks because I think that's something we've done particularly disastrously.

There's a variety of problems like that, but the important thing is there's a variety and that the solutions to those problems are actually, well, they're multi-dimensional and complex. And you can collapse all that into a single theory which is that all—there's one fundamental environmental emergency that's climate-related and that can be attributed more or less solely to carbon dioxide. And so the temptation there is to take this overwhelming complexity on the factual side and reduce it to the kind of simple mantra that anyone can master, really, in about 15 minutes, and then you're done with that whole problem.

It's like, well, no, the important thing is climate and the solution is carbon dioxide reductions. Now, the benefit to you is that you don't have to think anymore. But there's an additional benefit to the oversimplification which I think is even more nefarious, and it's analogous to the oversimplification that's part and parcel of the victim-victimizer narrative. You know, if you view the world through a lens of power and you assume that every human relationship can be understood in terms of victim and victimizer, then all you have to do as a moral agent is claim your allyship with the victim, and you've solved your moral problem.

The same thing applies on the environmental front is once you've established that carbon dioxide is the villain, then you can make yourself not only a moral agent but something akin to the redeemer himself by merely proclaiming your—you know, what would you say? Your moral commitment to the goal of carbon dioxide reduction. And so you eliminate having to think in the factual world, and you eliminate actually having to do all the work that constitutes genuine moral effort by swallowing the environmentalist narrative.

And then there's even a darker part of it, as far as I'm concerned, and this is where things go from merely ignorant and blind to outright malevolent, which is that once you've identified the problem and the moral solution, you can also take aim at anyone who hypothetically stands in the way, and you can demonize them. And as a consequence of your demonization, you can let the worst elements in your character have full reign in relationship to how you treat those people.

And you certainly see that with the victim-victimizer narrative that's being played out with Hamas at the moment. The Jews are the victimizers; the Palestinians are the victims. And so that means the Jews are properly subject to whatever punishment you feel inclined to meet out. It's the same with those who hypothetically are compromising the environment. And so it's such an ugly mess because it's oversimplification factor, it's ridiculous reductionism on the moral side, and then it's the provision of a world that allows your desire for vengeful resentment-driven hypothetical justice to have full reign over those you deem to be enemies of you in the planet—a very, very toxic combination.

And so that's the sort of thing—it's that combination I believe that actually presents the apocalyptic danger and not whatever other problems, severe as they are, that might confront us on the environmental side.

Well, I have to give, again, credit to the ARK organizers because I think you had the most definitive speaker, Steven Koonin, talk about the science. And when I'm in—I just spoke at a climate symposium at Harvard two weeks ago, you know, Jordan? And I always try to present facts calmly. There have been five mass extinction events on planet Earth in the last 500 million years. Every single one of them was caused by the planet cooling too quickly. That's how we lost the dinosaurs, as you know.

You can actually give a litany of statistics, some of which I've gotten from Bjorn Lomborg over the years from the Copenhagen think tank. The polar bear population is five times what it was 50 years ago. Total sea rise in the last 100 years has only been 23 cm—23 cm—meaning meanwhile a lot of these atolls in these island nations have grown 123 cm. Many of them are actually in better positions than they were. We are having less violent storms.

But I think the Steven Koonin argument, which is really an important one, is yes, human beings have an impact; yes, carbon dioxide matters, but it matters at such a small level relative to many other factors that are actually impacting the climate, many of which we don't understand. So where I take that—and I try to not oversimplify the climate mess—but I always say that it's a complicated two-part problem. One, it's a collective action problem that is to say the greenhouse gases that are emitted by three countries—only China, India, and Russia—right now are two and a half times that emitted by the entire North American continent and European Union combined.

So until India, China, and Russia are as serious about greenhouse gases as the rest of us are supposed to be, let's not kid ourselves; we still have a greenhouse gas problem. And then the other one is the "Laudato Si," Pope Francis, this is a multivariable calculus problem. What we have is people who are denying that there are trade-offs. Let's recognize that there are trade-offs, and let's have a calm, inclusive, fact-based conversation about what's the best thing to do.

I brought a prop today. This is a plastic bottle, right? It has water in it. Well, so I was telling the crew before we started this BT today, Jordan has one-third the amount of plastic that he had in it three years ago. That's not because of an ESG regulation; that's because it's cheaper to make it with less plastic, and you can do it with less plastic.

This is the kind of progress that is being made because we are more mindful. Consumers are changing their investment decisions. We are seeing people that want to have greater sustainability. We can look at Patagonia—this company that now only does clothes that if you bring them back, they repair them for you. Patagonia's products are flying off the shelves. People want to have a sustainable future. This is one of the reasons why we can be optimistic about humanity's future, Jordan.

And I don't downplay human influences; we have to worry about our air, land, and water for sure. 10 billion people on the planet! There were 1 billion in 1800, 2 billion in 1900, 4 billion in 1985, 8 billion in 2022, and we will peak out at 10 billion by 2073 according to the UN. How are we all going to stay here on this planet together, allowing everyone to achieve their full potential? We're going to have to live differently.

We're also going to have to live in an era of aging. In 2035, there will be more people over the age of 65 than under the age of 18. We've never had that circumstance before, Jordan. We're going to have to find ways to live differently, more inclusively, and more sustainably while we continue to grow, and all of that is possible. I wrote a book on it, and I'm just so incredibly optimistic about humanity's future, and the ARK conference really helped underscore a lot of those themes.

Well, and so one of the things that we could derive from, let's say, your discussion of Patagonia, is that these new ways that we're going to be required to find to live need to be offered to people as an invitation and not forced on them. And so here's one of the things that happened in the aftermath of the ARK conference that I found extremely interesting.

And so we had quite a range of speakers and quite a range of approaches from speakers and political attitudes. And what happened was that the speakers who were the most political and who were the most tendentious and accusatory, let's say, in their approach produced the speeches that got, by thinking—what's the word I'm thinking of?

Okay, yeah, Kevin McCarthy particularly. This isn't an insult; you know he's a politician. But okay, but what happens? It's so interesting to see because the talks that really offered an invitational, metaphysical vision got exponentially more views in the aftermath of the ARK conference. That's yeah.

And so—but I think this is very much well worth noting, is that, as you point out, people do understand quite broadly that we have to live in something approximating harmony with the broad natural environment, and people are interested in finding ways to do that. But if they're forced or manipulated into doing that—which I think is, it tends to be the approach of organizations like the WEF and the UN and even the European Union to a large degree—if they're forced to do that, or connived into it, or even nudged into it—which is a very manipulative way of going about things—they're going to resist, they're going to fight back, and we're not going to get anywhere.

Whereas if people are invited and offered an alternative that they can undertake voluntarily, the probability that they're going to first attend and then comply is extraordinarily high—not comply; that's not the right word, but participate. You know, you see this in psychotherapy; it's a psychotherapeutic truism is that if you are setting up a situation where someone is pursuing positive behavioral change, they have to determine the direction of that change and come to develop and accept the strategies voluntarily, or all they do is kick back in all sorts of ways that are counterproductive and produce resistance.

But it was so interesting to see that unfold at the ARK conference because the speakers who were visionary and invitational had by far the biggest effect, and they really set the tone for the conference too.

And so we really tried to learn that lesson, right? This has to be an invitation. That could bring us to our discussion of ESGs. Do you want to—let's let—I just love to give an exclamation point to some of the points you're making, though, Jordan, because you worry about a top-down solution, and there's every reason for you to worry about top-down solutions. We see it right now. I don't know if you know, but clean energy stocks this year are down 25% while the stock market is up 25%.

We've been forcing so much money into some Clean Energy Solution—windmills off the coast of Maine and others—that are simply not working out. Similarly, all these incentives to go buy electric vehicles are not working. So there's General Motors, Ford—yes, they're worried about a UAW strike, but they're even more worried about the fact that California is mandating them to create electric vehicles that people are not buying. Jordan, people are not buying those cars.

So what are we going to do? Have a bunch of EVs out in parking lots that nobody's willing to buy and think that we're solving our global climate crisis? We not? So there is this danger, as you say, as you enunciate, of top-down solutions that are not being met by bottom-up, and this is the beauty of the market. You know, Friedrich Hayek has a lot to say to us still, you know.

I was thinking as I was preparing for the show this morning that God himself could not create a better system than the free market, and the reason is that the free markets consist of billions and billions of decisions that are being made by consumers out of their own free will that are ultimately going to drive where we're going to end up.

And it's so important to remember that, that consumers’ attitudes change. Consumers are going to want to have, for example, Louis Vuitton is right now designing all of these new luxury leather goods that are made out of mushrooms so that they can say this next very luxurious bag is carbon negative. And I promise you they're going to sell a lot of those bags to people out there who really want to be able to say, "Look, I have a carbon negative bag."

The beauty of the free markets, uh, governed by men and women of conscience who are mindful with their consumption patterns and investment patterns, and that's why I say mindfulness. We're going to get the world we deserve, either in this world or the next. Greater mindfulness will lead to greater outcomes. But we should let the markets—let the markets work because they are better at delivering the future than anybody who's guessing what the future will be.

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Let's delve into that a little bit. So, the technical reason for that, so that everybody watching and listening understands, when people promote the free market, that can be an ideological promotion, or it can be an observation of sheer computational power. So imagine that you're trying to make pricing decisions and purchasing decisions, which you have to do all the time in this world. When you're trading one thing off against another, you could imagine either that you set up a system—just think about it computationally—you could set up a situation where there are literally millions, or even billions, of local computers gathering data about local circumstances, making trade-offs with regard to everything that's available to them in terms of data in that local environment, and then communicating in a network fashion to indicate trends and future probabilities.

So, what needs to be produced, for example? Or you could replace that by a single computer, or ten of them, that are trying to gather all of that information, with no eyes on the ground, relying on their hypothetical ideological expertise. And that's the central planning model. It's like, why the hell would you exchange billions of distributed computers with sensory apparatus on the ground for a handful of centralized computers that can't even, in principle, have access to the proper data? It's a preposterous claim; it's an absurd claim.

And it's not like there's something magic about the free market except for the fact that it's an optimized system of distributed computation, and there is no replacing that with centralized view. And you do get this problem that you just described. I mean, I think with regards to EVs, I've wondered this for a long time—electric vehicles—is like, we know perfectly well, not least because of what happened to California when they announced that everybody couldn't plug in their electric cars at the same time because the grid didn't have the capacity, it's like I've been wondering, well, why are we being enjoined to buy electric cars when we don't have the grid power to recharge them? And then I thought, oh, well if the plan is actually like the C40 plan, which is the plan put forward by a consortium of large cities, if the plan is to reduce automobile ownership by 95% anyway, it doesn't matter if you force people to buy electric cars that no one wants and that we won't be able to recharge because the bloody plan is for people not to have cars at all anyway.

And that's a—that's well, right? And that's such a terrible plan because cars—there's very little difference between a car and freedom and wealth. It gives you such an unbelievable range of options at any given time, ridiculously efficient use of private time. And anybody who objects to that, I think, is immediately to be viewed with extreme suspicion, especially if they're trying to implement top-down compulsory controls. You know, one of our principles at ARK is no policy that requires compulsion is optimized. There's a mistake somewhere, you know? That gets tricky when you're dealing with criminals, you know, because sometimes people are in situations where they won't behave socially or psychologically in a manner that reflects psychological integrity without compulsion, but most of the time the rule of thumb has to be if I have to force you to do something, I'm putting forward the proposition improperly, at minimum improperly.

Well, I, as you're speaking, you know, and I'll talk about a couple of different books today if I'm allowed, but one that really did reach me was written by Raghuram Rajan, who's a professor of finance at the University of Chicago, and it's called "The Third Pillar." And what the thesis that Rajan has—he's also the former Chief Economist of the IMF and former governor of the Reserve Bank of India—but Jordan, what his thesis is, is that societies thrive when they have the three primary pillars of societal good in balance.

One is the markets. If you don't have markets, you're not driving prosperity. The second is the state. You need good— you need good government. I don't know about you, but I like getting my driver's license on time; I like it when the stop lights actually work. We need good government. The government that governs least is not necessarily the one that governs best. And I think Canada is an example of that.

But the third one is actually community or civic society. And what the thesis that Rajan puts out, I think, very effectively, is that if you have societies that have either one of those out of kilter where markets are too strong, then we run into environmental problems or we run into issues of distribution. We do have externalities—negative externalities in markets that need to be corrected by proper government. But the role of community, and the role of NGOs, and the role of the volunteer sector, the role of faith in a community—this is equally important. If societies have any one of those missing, they are not in optimal balance. They tend towards crony capitalism, which is this topic that Paul Marshall spoke about, as you know, at ARK.

Or they tend toward inefficiencies. You have to have all three. We need markets; we need an optimal state; and we need the community thriving—NGO sector thriving, nonprofits, which we do have in the United States. In the United States, we could use slightly better governance—this is where we're falling down, quite candidly. You know, I bring up Paul Marshall. I wrote two articles after the ARK conference, and one was inspired by Paul Marshall, but not in the way that he thinks. He actually spoke from the stage about the negative impact of Uber, as if it had demolished the lives of many livery drivers, which it has. It has interrupted the lives of many livery drivers.

But Jordan, it has vastly expanded the market for livery driving around the world. There have been 4.2 billion Uber rides since it was first launched, and the number of markets there are 5.5 million Uber drivers that turn on and off when they want to go to work. This was a wonderful market innovation, but it's what E.F. Schumacher calls creative destruction. Markets need to be destructive just as they need to be creative in order to maintain that efficiency.

There's going to be disruptions that take place; Uber is a good disruption. I was talking to Philippa about this afterward; he said, well, it helps if you're Paul Marshall because you always have a driver waiting for you. Those schmucks like me that come to Phoenix and need to find a way to get in from the airport, I'd rather just do it on my Uber app.

But the advantage to the market too is that it allows those disruptive forces to operate in a comparatively micro level. I mean, there's still radical transformations in market economies, but the problem with the centralized economy is that they're so stiff and blind that adaptation only occurs in catastrophic fits.

Whereas in a dynamic market, there can be local small revolutions that are continuous. And the way of conceptualizing it technically is that the environment transforms at a rate that slightly exceeds our adaptation, so there's always unexpected things happening as a consequence of the action of reality itself, and then we have to fight to keep up, and we're always a little slow on the uptake.

And so the adaptation process can be disruptive, but the wider the distribution of responsibility for adaptation, the larger variety of revolutionary adaptations that can be on offer, and the smaller and more matched they are to the environmental transformation they can be. And so, you know, it is frightening when you see a novel technological move forward like Uber, which does disrupt industries and cause a certain number of people grief.

But that's much better than refusing to adapt to the necessity for change and then having to un involuntarily undergo a cataclysmic form of re-adaptation. I mean, that's really what happened when the Soviet Union collapsed. It was that so many things had gone wrong that the only solution was that the whole system had to die.

Well, that's an obvious evidence of market failure, when huge things die, small things didn't die fast enough. That's really the rule of thumb. So I think there's so many interesting lessons too right now, Jordan, from AI and from the effective altruism movement—many things that we can learn about the governance issues that just came out of OpenAI.

And we—I don't want to go down that rabbit hole, but a lot of them, again, I think are highlight the principal points we're making: markets are important; let capital move freely; let there be innovation. As you know, the whole idea behind OpenAI was to have an open-source platform that everyone was contributing to, to make it altruistic so that it could be done in a good way.

And then they found, well, we still need billions of dollars. How are we going to raise the billions of dollars to create the computational capacity that AI and ChatGPT really requires? And they knew they had to have that in a for-profit arm. If they did not have that in a for-profit arm, they would not have found the capital.

So, important lessons, I think—yes, of course we need to be mindful, but there's no way to build the world that we want to build where the needs and aspirations of the trillions of people yet to come, because, by the way, if you actually look at where Homo sapiens sapiens are in the normal course, there are trillions of human beings yet to be born. This is the William McAllister arguments that you probably need to have on your show if you haven't had him on yet.

And this is something that the pope speaks about very eloquently also in "Laudato Si," which is that we do have, in many ways, Jordan, we do have responsibilities to future generations. And we need to think: how often do you think about your grandchildren? How often do you think about your grandchildren's grandchildren? Do you care about them? Do you love them? Is the life of your great-great-great-great-grandchild any less important than your life? No, it's not! So let's go about this process of thinking how it is that we're going to create this sustainable planet.

And I spent a little bit of time talking about, you know, the broad philosophy of Rajan, but where I have spent a great deal of my life and work is in Catholic social teaching. And I’d love to come to Catholic social teaching at some point on this podcast because, as I say, it happens to be extraordinarily relevant and pertinent for the times we live in—not because it's Catholic; it just happens to be Catholic.

It's actually about 150 years old, and I think the broad principles of human dignity, subsidiarity—which you spoke about very eloquently from the stage—responsibility, personal responsibility, and then solidarity—the third principle of Catholic social teaching—which is that we are our brothers' and sisters' keepers. There are too many people, Jordan, that cannot take care of themselves, and it is the responsibility of the strong to help the weak.

It is the responsibility for those of us who have more capacities and more capabilities to give that hand up to those who do not have it. That is Catholic social teaching. And what's interesting is that subsidiarity argument, you know, turns out the Declaration of Independence is right: all men and women are created equal; they're obviously in the image of God, and they are entitled to a life of liberty and the pursuit of happiness—their own fulfillment.

But the simple fact of the matter is that that cannot be achieved without people taking personal responsibility and families taking responsibilities for their own families and then communities beyond that. That is how the system is going to work. Subsidiarity and solidarity are going to live in constant tension. We're never going to have them resolved. There's always going to be somebody else who needs to be helped. There's always going to be somebody else who needs to have more responsibility. And that is that struggle uphill that you spoke so eloquently about time and again at ARK.

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So, the idea of responsibility for future generations—let's wander into the Catholic social teaching domain for a moment. So I spent a lot of time recently writing this book, "We Who Wrestle With God," and one of the chapters in that book deals with the story of Abraham. So Abraham is portrayed as the father of nations, and so my sense is that the story of Abraham contains within it—the seeds of what, would you say? It contains within it a representation of what it means to live in the light of eternity.

So imagine that you could adopt an ethos that set you up in the best possible manner to increase the probability that your children would survive and thrive, okay? But then let's extend that because that's not sufficient, and you could even make an evolutionary biology argument in this direction. You want to develop an ethos that not only increases the probability that you will have children, and that your children will thrive and survive, but that establishes a pattern that they imitate that increases the probability that their children and their grandchildren will thrive and survive.

So it's an ethos that has to have multigenerational implications. Okay, so that's exactly what Abraham does. Now, and that's—the manner in which that's to be done is actually laid out in the narrative. So the first thing that happens that's very, very interesting because it has to do with material satiation: at the beginning of the story, Abraham is already—in the arms of the infantile utopia, right? Because Abraham has rich parents, and he's privileged, and he has everything material that anyone could ever want.

And yet this voice comes to him—it's the voice of his ancestors and God—and it says, "Go out away from what is secure and have the adventure of your life." And there's a call—that's the calling. And Abraham attends to that calling and moves out into the world to cataclysmic end, right? Because he encounters famine and slavery and the connivance of the aristocrats to steal his wife and battles with his in-laws and like the whole terrible array of potential catastrophes in life present themselves to Abraham.

But he maintains a sacrificial attitude, right? That's emphasized throughout the text because every time Abraham embarks on a new adventure, starts something new, he rekindles his affiliation with what is highest and moves forward in faith. And that's presented as part of a multigenerational vision.

And so one of the things that I find very exciting about the potential union of something like evolutionary biology and deep theology is the idea that if we oriented ourselves properly to the highest good—which is, by the way, the message that's in the Sermon on the Mount—we would see in that good the manifestation of the pathway that would enable us to live in a way that would Ure that respect for multigenerational continuity that you just spoke about as the soul of sustainability.

And so what that means is that it's the adoption of individual ethical responsibility in the highest manner that constitutes the proper pathway to sustainability and not top-down manipulation of the political, economic, and social systems to bring about some form of what plans stability, which we can't do, right? We can't do that.

No, I mean, you said—the mere fact that you said earlier—it's like if you look at China and Russia and India, first of all, we have absolutely no right to tell them that they can't take the same pathway to wealth that we took, and that was going to involve the use of coal and it's going to involve the use of fossil fuels, and we might as well bloody well just get used to that because that’s going to happen.

And then maybe out in the Western countries, we could be laying the groundwork for a nuclear revolution and show the pathway forward for these countries that will have to transition through fossil fuels. But there's no bloody way we're going to be able to do that by imposing our idiot utopian views on China and Russia and India. They're just going to tell us to go to hell, which is what they should do.

Well, I'm thinking of your Abraham’s story, you know, Jordan, and just the importance of it and focus on future generations. And one of the lines that you used repeatedly in London, which has been inscribed into my brain, is about tilting the world towards heaven and not towards hell. How do we tilt? You know, there’s a lot that we can't do, but how do we, you know, if the arc of humanity bends towards justice, to what degree can we help get that justice arc going in the right direction?

And another book that I wanted to give a shout out to that I know you have read and so many people have is Bjorn Lomborg's most recent book, "Best Things First." And, you know, let's just be very clear: in this book, Bjorn Lomborg points out 12 different policies, five of which are related to health, two of which are related to nutrition, one of education, and four of which are economic, that would cost $36 billion a year in a global economy that has $112 trillion—$120 trillion depending on purchasing power parity—but less than one-third of 1% would actually save 4.2 million lives and would generate a higher GDP of $1.1 trillion, particularly in sub-Saharan Africa where this growth is most needed.

And these are simple: tuberculosis, malaria, ending neglected tropical diseases, agricultural abundance—you just look through, you know, I would like to give a copy of that book to literally every single policymaker that is to say, every single Abraham on Earth, saying, "Look, here are things that we can do right now. They're very practical: ending neglected tropical diseases, doing e-procurement so that there's a much greater transparency. Free trade—we're all against right now; everyone's clamping down on free trade. No, free trade benefits humanity overall. We've got to continue to find ways where we can trade in accordance with comparative advantage. This will, in fact, lift these billions of people who are not yet within the cycle of abundance, not yet in free of energy insecurity."

It's another topic that we touched upon in London but that we need to return to. There are three billion human beings on Earth that live in energy poverty. They can't turn on the lights. What they want more than anything—it's not air conditioning; they actually would like to have a lamp to read their books at night. They can't even read their books.

So these types of Bjorn Lomborg policies, these types of—I have many of them in my book as well, as well as a concept I called "Exemplars of Hope"—very huge returns on investment. Some of those investments have to be done human to human. And I always say, you know, Jordan, there is no marginal tax rate that gets you to heaven. If your earnings are taxed at 100%, there's no moral—you know, paying them, yes, it's legal, but that doesn't get you to heaven. To get to heaven, it will be by your works alone. What you do and how you care for those who are most in need and how you can do that at a societal level, which I believe you do with your podcast, which I believe you do with your teaching.

I was listening to one of your Joe Rogan conversations recently, and you were talking with joy—absolute joy—about how people come to you and talk about how their lives have been transformed because of the type of self-help advice that you've given to them. I look at these things much more from a—what is an economic solution? As you know, I've written this book on ESG; I'm sure we'll get into ESG a little bit.

I'm probably the number one critic on the face of the Earth of ESG—not because of what it's trying to do. I believe that ESG was born of something very good. I think there's a lot of great intentions out there. I really don’t want to discourage or disdain the intentions of even people who are out there protesting for zero carbon emissions. Their intentions are good, Jordan. We need to work with those intentions. But what will actually work, what practically will create a globe of greater economic growth that is simultaneously more inclusive—welcoming in those who have not yet had the great benefits that they need and should have, and have every God-given right to have, just like you and I do—to have the types of material abundance where they can pursue all their other dreams, as well as sustainability.

Sustainability is not going away. We're going—we're going to need to talk about the fisheries and how much cod is off the shore. If we're not going to be mindful about these things, we're screwed. We're going to be screwed, so I make that case. But I can talk about homelessness; I can talk about solutions for recidivism; I can talk about solutions for infant and mother nutrition. There are solutions out there that, just like Bjorn Lomborg points out in his book, are not that expensive relative to the huge benefits that we can get from them.

And this is something—let's do two things. Let's wander through the ESG territory so maybe you can illuminate my guests as to exactly what ESG means and why it came about and then why you're—you're leery about it. And then let's turn to a discussion of solutions. So I'll let you go ahead with ESG to begin with. Educate people to begin with because it's—it's not easy for people to understand even what ESG is.

So, the truth of the matter is that the environmental, social, and governance movement—the ESG movement—which is all the rage, could not be understood without the context that's provided by the United Nations and everything that has happened since the Second World War. So it's a story I need to tell. So, as you probably remember, at the end of the Second World War, Eleanor Roosevelt worked together with 42, 43 nations, and they devised the Universal Declaration of Human Rights.

And this was a very utopic document, Jordan, that said that every human being is entitled to—obviously, to freedom; there's a whole range of inalienable rights we're talking about. But then there are enumerable rights: they're entitled to food; they're entitled to shelter; they're entitled to education. So this was quite something ambitious to do at the end of the Second World War because the world was devastating. Well, we didn't know how we were going to rebuild the European continent. Japan was a complete mess.

And yet here was this utopic statement of how humanity—what humanity should ultimately be striving for. Fast forward 50 years from the signing of the United Nations and you have the United Nations espousing Millennial Development Goals—the United Nations Sustainable Development Goals of which there are now 17. And what happened over the course of that 50 years is something that is insufficiently celebrated since the end of the Second World War till about 2000, the economic transformation of the globe was beyond anything anyone had possibly imagined possible.

The actual material abundance that has emerged since the Second World War is simply unfathomable to your grandparents or your great-grandparents. They would have no idea. So per capita income since 1980 alone went from $25,000 to $122,000. What comes with all of the growth? Here's a statistic that I love, Jordan: from 1990 until COVID, 128,000 human souls escaped abject poverty every day—every day.

The number of human beings on the planet that were living on $1.91 a day, which is how the World Bank defines abject poverty, in 1980 was one out of every two. One out of every two human beings on the planet struggled to find a meal, struggled to find where are they going to live, would they have any heat overnight? That statistic today is one out of 10. And of course, that transpired at a time when population growth was massive. Along with all of this material and economic abundance has come what always happens: greater social, educational, and health advancements.

So we've had a circumstance where life expectancy has expanded by 22% over that same period. Infant mortality dropped from 81 out of every 100,000 births to 25, so infant mortality fell 70%. Literacy rates massively improved. What happens when prosperity grows is that other aspects of human existence improve as well.

So what happened then—and I'm coming to ESG, I'm sorry for the prelude, but it's necessary to have—there is no ESG without this material abundance. In 1999 and 2000, the United Nations convened the greatest collection of political leaders in history. And that collection included kings, prime ministers, and they designed the Millennial Development Goals.

Do you remember the Millennial Development Goals? The 2000? And the Millennial Development Goals was, "Let's get rid of poverty completely, let's have a K to 2 universal education around the globe—things that were unfathomable 50 years earlier—and let's find a way to make sure that there is greater political freedom broadly speaking."

What ended up happening, though, is continued progress was being made on those, Jordan, until about 2005 when Kofi Annan, who was the Secretary General of the United Nations, convened a group of financiers, and he said, "Listen, I want there to be a group of financiers that come up with investment principles that would help promote these United Nations Sustainable Development Goals and Millennial Development Goals." Why don't you very smart people—70 of them he picked—go in a room and come back and tell me what those principles for responsible investing are?

This is where ESG came from. ESG emerged in 2005 with Kofi Annan ringing the bell at the New York Stock Exchange announcing these investment principles. What were these investment principles? They were a series of principles relating to environmental, social, and governance factors that this group of financiers had assessed could present material risks—material risks if we don't handle these things well enough—they will lead to financial failure; stocks will go down.

There was—so ESG actually came out of the United Nations Declaration for Human Rights, the Millennial Sustainable, and the Millennial Development Goals and the United Nations Principles for Responsible Investment that first went public in 2005. Today, there are more than 6,000 signatories to the United Nations Principles for Responsible Investment, Jordan. Those institutions collectively manage $120 trillion in assets.

That is to say they manage one-half of all the institutional assets that are available for investment in the world. What are these people doing? Well, they've come up with a series of products and ideas and corporate resolutions, and any number of things that are intended to highlight various elements of these environmental, social, and governance issues of pertinence to them.

So, you know, we tell the Bud Light story, right? Someone decided that it was very important for Bud Light to expand its market share. They need to be expanding in a DEI-sensitive way. What did they do? They have a commercial that was misconceived; it pissed off two-thirds of the people who were actually drinking their beer and didn't result in any—so the ESG rules, as they have actually been applied, have had a very important series of unintended consequences that haven't always been—well, that have been deleterious.

My principal criticism, though, of ESG as a finer—and the work that I write about in the book—and the reason why I believe ESG has neither done well nor much good is what I say—that was a Wall Street Journal op-ed that I wrote that was read 4.2 million times. It hasn't done well because, in actual practice, Jordan, what people have done is, here's these ESG rules in the S&P 500, which of course is comprised of the ostensibly the 500 best companies in the United States.

Typically, what the ESG enthusiasts do is they take out 400 of those and only invest in 100 of the remaining stocks. In actual practice, that means they were no longer investing in oil and gas; they were no longer investing in what they regarded as non-virtuous companies. Well, this is just so silly. This is absolutely silly. The idea of you not owning ExxonMobil is going to somehow change the temperature of the Earth is just the silliest thing imaginable.

In fact, it has the entire thesis on its head. There’s been this concept of socially responsible investing that has been around for centuries. Many people avoided investing in the slave trade, right? Many people—religious groups founded, absolutely abhor— but the slave trade continued, didn't it? Why? It continued because one quarter of humanity was still willing to invest in it.

It turned out, as abhorred as it was, it was incredibly lucrative. The same thing is true in modern society. There have been a number of investors, likely most likely religiously based, that have avoided what are called sin stocks. The sin stocks are in four areas: gambling, alcohol, tobacco, and firearms. So many religious organizations have not invested in these for, but has that stopped smoking? Has that stopped people drinking? Has that stopped people from buying a firearm? Has that stopped people from gambling? Of course it hasn't!

So the ESG movement, investment movement, is based on the same principle of, if I don't invest in ExxonMobil, somehow the temperature of the Earth is going to improve. It's pure silliness, Jordan. It's pure silliness. So I gave quite a quite an exposition there. Where I wanted to come out is that my criticism of ESG as an investment movement is not that it shouldn't be trying to solve the problems of our times, but that it hasn't.

It's done exactly the opposite of what needs to be done. And I'm a big proponent of impact investing, and I can give you literally a hundred examples. Affordable housing, DEI opportunities for female minority entrepreneurs that genuinely address some of these issues of inclusivity and sustainability. There are ways to invest that genuinely takes carbon out of the air. You can do that with a green bond fund, but you cannot do it with these ESG equity funds.

So let me ask you what might be a more fundamental question. I mean, it seems to me that Anan's recommendations were ill-founded a priori. And let me walk through this and tell me what you think about it. Because he's making the assumption that there is already irresponsible investing that can be rectified by conscious attention to a set of ethical principles.

And see, this strikes me as an ill-posed problem because if you have any sense, and you're investing, you invest as wisely as you possibly can. And the reason you—much considered—and the reason you do that is because, well, you don't want to lose your money—your hard-earned money.

And so you're already very much motivated to invest wisely. Now, you could say, well, that would open the door to people making a short-term killing at other people's expense, and maybe that's what happens with so-called sin investing, but my sense is that, well, you can get away with making a short-term investment at other people's expense once or twice, but you're going to get hammered for it sooner or later.

And so Anan's notion was predicated on the idea that there was a way of imposing a priori ethical framework on the problem of investment that would produce investments that would somehow do better, which strikes me as highly improbable, and that would actually increase, what would you say, ethical behavior as such.

I would say that people are already as motivated to invest wisely as they possibly can be if they're investing their own money or money they take stewardship of. And the imposition of some top-down ideological framework is only going to compromise the investment strategy and not only the investment strategy but also the market strategy of companies.

I mean, look, we've seen, well, Budweiser is a great example of an absolute bloody catastrophe. Target put their neck in the same noose. I think Disney's stock is down something like 50% because they fired everybody who could actually tell a story and brought in people who did nothing but, you know, produce second-rate ideologically oriented narratives of the sort that flew in the face of what their customers demanded and undermined their entire brand.

And so how deep do you think the conflict between the ESG attitude and the fundamental free market principles of responsible investing actually runs? Because it looks to me that Anan took what was essentially a socialist or even a communist view, which is that, well, the market itself can't be trusted, and it's necessary to generate these a priori ideological frameworks because that would direct everything much more effectively than it would be otherwise in a, you know, honest free market economy.

The whole thing, to me, just strikes first of all there's no bloody way you're going to beat the market with a strategy like that—nobody can beat the market, not continuously because they just have all the money.

So there is this problem that it doesn't work in practice, but I also think there's a problem that it doesn't work in principle—that it's the wrong way to go about it.

It is certainly the wrong way to go about it, so much so that I have this article that I just shared with you that's coming out next week with AI that I co-authored with Senator Phil Graham where we talk—we call for the end of ESG. It's an irredeemable project at this stage, Jordan, because it is, as you say, falsely premised. And if something is falsely premised from the beginning, there's no way to adjust it to make it work.

And you've said something that's very, very wise. And you know, Warren Buffett and Charlie Munger—recently passed away—they've lived their lives according to this maxim: it is extremely difficult to beat the S&P 500. You can own it for one basis point; that's what most people should do.

But I'm someone, you know, and my career has been about advising people what to do with their assets, their investments. And I'm somebody who deeply believes, Jordan, that if you're willing to make an investment that's going to have a lower return but it's going to result in—I don't—you know, affordable housing, or it's going to bring clean water to a village in Rwanda, or it's going to—and you're willing to take a lower return, my God, go at it!

$51 trillion in wealth is about to be passed from the current generation of billionaires to their, let's say, less hardworking children. And that particular group of individuals are very mindful for double-bottom lines—that is to say they do want their money to do well and to do good.

And an important part of my new business and all the work that I'm doing is to provide investors who have this double-bottom line mindset that want to do well and do good and are somehow willing to take a lower return as long as they somehow benefit some corner of society. Well, there's going to be a lot of capital that's looking to do that, and that's going to be an important part of what creates this inclusive, sustainable growth world that we're going to need.

That's going to be this important part of the community. That community— you know, we said it's the market, it's the state, and community that have to work together, and we're going to need that community to be part of the solution.

So let me ask you a question about that. I mean, I certainly understand the direction that you're trying to aim a certain percentage of investors in, and I can imagine that that would also small percent, a very small percent.

Well, and maybe a percent of someone's portfolio, but I'm also wondering, you know, like one of the principles that I've abided by when attempting to produce even products that are of particular benefit to people psychologically—like I have a suite of psychological interventions online that I've been marketing to people for about two and a half decades. I mean, one of the principles that we established, my business partners and I, before we created these interventions was that not only did they have to be useful—to do good—not only did they have to have—that they had to be of demonstrable good, but they also had to do competitively well.

So if I said, well, maybe—so is it too much to ask for people, for example, who are providing affordable housing, let's say, that they do it in such a canny manner that they also equal or beat what you might expect for standard market returns? And couldn't you use that as an indication of the quality of their offering?

Or do you feel that there are situations where placing both constraints on people—you know, you have to do good and you have to do well—makes movement forward too difficult?

Well, let me give some numbers to frame the challenge and then answer your question directly. So, as you probably remember, the name of my company is 1.6. 1.6% of institutional assets is $3.5 trillion. So, this is a little bit like the Bjorn Lomborg number. If we actually—if institutional investors and ultra-high net worth individuals were to allocate 1.6% of their assets per year to these types of investments that we're talking about—true double-bottom-line investments, affordable housing—I can come up with a number of health, financial inclusion, education, there are any number of—book nook is the number of online learning tools that we could actually achieve the United Nations Sustainable Development Goals by 2030.

So that is the amount of private capital that is needed to fill the gap. So just put that number out there so you can frame that. But let me respond more specifically to your—I think the one area of investment that I've spent most of my time on in the United States, Jordan, is affordable housing. We basically shy—I mean, we have a homelessness problem; we have an affordable housing problem. There are only three ways, really, genuinely, to build wealth in a lifetime. One is to start a business or be an amazing podcaster like yourself. Two is to own the S&P 500 for 30 years.

But the third one is to own your own home rather than rent. So we need to find a way for there to continue to be greater access to home ownership from those who right now come out of college with these student loans and can't make a downpayment. We're going to have to find it.

It turns out that the equity returns on some of these affordable housing programs in Nashville, in Austin, across the country, the equity returns to the investors are between 16% and 18% a year. Well, I’m sorry, dear friend, that is still 12% ahead of the inflation rate and well in line with the actuarial needs of a number of the retirees. If you can actually have a 15% return, you double your money every five years. Who doesn't want to do that?

So an important part of what we're doing at my company is highlighting where these opportunities for double-bottom lines truly exist. It's something that I would love a future ARK forum and we're talking about ARK in the United States having—it's one that I would like there to be a thread on in ARK in the United States because I think the United States has a far greater likelihood of leading in philanthropy and leading in these creative solutions than Europe, where they expect governments to do everything.

You know, there's hardly any philanthropic giving in Europe because everyone says, "Well, it's the state." You know, there's zero philanthropic giving in Russia and China because the state is the only thing. Imagine trying to be a nonprofit in China or Russia solving problems—you get outlawed.

So the very interesting thing, though, is a lot of creativity is coming from these various organizations. And I always give a shout out to my dear friend Jim Sorenson and the Sorenson Impact Team, which is in Salt Lake City. You should also have Jim Sorenson on at some point.

So he pivoted 100% of his portfolio three years ago, Jordan, to impact. The only types of investments he makes now have to have verifiable impact, and he's outperforming the market. He's outperforming the market by 100%. Now, this to me, this is the sweet spot. If you're outperforming the market and you're solving some major social and environmental problem of the day, I'm all in! I'm all in!

Right, right. So you are making the case that, with sufficient judgment, you can have your cake and eat it too.

Well, that was my sense with regards to the strategy, emphasis on the sufficient judgment. It's hard. You have to be mindful, and there's a lot of hokum out there. There's a lot of pretenders and false gods and cryptocurrency trad that have these, you know, 'sols.' You really must do your homework to make sure that there is verifiable additionality. That is to say, a dollar that is put into the strategy is going to create a solution that absent that dollar does not happen. There needs to be real impact, and that's something that you can say in affordable housing; that's something you can say in some of these educational initiatives; financial inclusion initiatives; improving people's FICO scores, for example, gives them direct access to borrowing.

There’s a whole business operation, Operation Hope, in Atlanta—a great NGO—one of the organizations I call an exemplar of hope that has a proven pedagogy, Jordan, a proven pedagogy that improves inclusivity and sustainability without compromising economic growth. There are literally dozens of these organizations throughout the United States, and a lot of what they're doing can be replicated around the world.

So I've kind of got the—you know, Bjorn Lomborg has done a really good job on these top 12. I got the next one’s down on homelessness, recidivism, job opportunities. Here's a great one from Catholic Charities Fort Worth in Dallas. So it turns out, as I'm sure you know, 95% of the community college courses that people take in the United States of America—which are free basically—do not lead to a certification.

It turns out a lot of people taking those community college courses, it's a crazy waste of money. What did they learn at Catholic Charities Fort Worth? They learned that if they actually give a caseworker to everyone who's trying to get a community college degree—which is an expense; it's like a BJ Lomborg cost-benefit expense—but if you get that, the completion rates multiply fivefold.

And then what happens? Those mothers—then they're usually single mothers, you know, in their teens or early 20s—they go from welfare dependency to work independence. And this is where we got to. This is what the call for greater personal responsibility tells us. This is what the call for Jacob's Ladder tells us. This is what the call for greater inclusivity tells us. This is what Abraham would do if he were alive today, right?

Okay, so that program that you just described—that's something akin to a mentorship program—is so that people are going to college, but they don't have guidance. They don't have any way of bouncing their plan off someone and everyone would say, "No, if you have Mom take care of little Juju on Tuesday afternoons, you can make this course; you're able to make it if you just adjust your schedule and drop off and here's another daycare program that you could use that you haven't heard of."

That type of additional assistance, let me give you one though that I love even more, which is teenage recidivism. So it turns out the Laboratory for Economic Opportunity at the University of Notre Dame, which is an anti-poverty lab, studied what was going on with teenage truants in the state of Indiana. And you know what they found out, Jordan? They found out that if they teach a course of Aristotelian ethics to these 13, 14, 15, 16-year-old kids—all of whom are brighter than we give them credit for—while they are going through these treny programs, recidivism declines 70%.

These poor children, God bless them, have never had anybody to tell them this is good, this is evil, this is what an examined life consists of, this is what an unexamined life results in. And they're reading the original text; they're reading Aristotle; they're reading Plato.

You know, this—you know, I was very moved by Oz Guinness, for example, at ARK. It's the kind of thing that Oz Guinness would have designed himself. So when you think of these individual programs that I'm describing, another one that I love in here in New York City is Ready, Willing and Able. We're in a— we're in a New York studio here, and I'm sure that folks here have seen—there're these guys that are pushing buckets on the street corners around New York City, and their job is to sweep up the streets.

All of those guys are homeless or former incarcerates, and they're given a six-month opportunity to decide if they stay clean, they stay off of drugs, they sleep in the home that is provided to them. There's a communal living circumstance, and they clean the streets for which they are paid by New York City. They can then choose from more than a dozen accreditation programs ranging from becoming a plumber to becoming a massage therapist to any other.

And again, Jordan, they are moved from dependency to independence, from a life of despair to a life of meaning, fulfillment, and purpose. And these are oftentimes funded by these social bonds that are based on outcomes. The things that are going on in this sort of social engineering space, social entrepreneurial space, it’s very exciting. It’s very exciting, and something that I hope future ARK forums will be able to really put in bright lights—solutions, things that are working, ways that we are changing individuals’ lives in the moment that is verifiably not only fulfilling them but lowering the burden on society.

Taking people—Reno, Nevada has halved homelessness in the last six months. Do you know how Reno, Nevada halved the homeless rate? No, they built enough affordable housing. And then they made it a law: you cannot sleep on the streets; you are arrested if you stay on the streets. So everybody had a place to go; they had to go to these places. Guess what happened when they went to these affordable—their were then given career counseling; those who had drug problems were given drug attention; those who are mentally ill—and a good part of our homeless problem in this country is mentally ill people.

We let them ride the subways here; it’s crazy. No, they have to be put into programs, Jordan, that actually match them with the needs that they have. I don't need to tell you this. And there are—there’s always enough beds in the city of New York for homeless people.

But then, combining that with the proper level of training, counseling to get to independence is what's necessary.

Okay, so I would like to hear some more of these solutions, but maybe right now you could also—I’m curious too. How are people who are watching and listening to participate in programs like this, and where could they turn to for the kind of investment advice into these programs that you would regard as credible and reliable?

Yeah, yeah, so I have to be careful here because this has become very self-promotional. Well, we can let people start through that themselves.

Okay, well my website, www.1point6.com, highlights a whole range of these investment possibilities, and I have a what I call a curated Town Square, which is called the Solutions Forum. And on the Solutions Forum, where I post, for example, my video from ARK but any other, is an open source. Anyone who wants to put out their ideas for what they're doing on homelessness, what they're doing on these various social issues, are able to just—so that would be one area that I would suggest.

An Exemplar of Hope, which is something that I've trademarked, is global. They have a bunch of these. There's a wonderful one in the UK called Make It Click, which goes home to home and teaches people how to use internet services and how to actually gain access to the information that's already in their homes that they didn't know was available to them.

Make It Click program—these various exemplars have many opportunities for volunteerism, for other forms of time, talent, and treasure. That's what the philanthropic world needs: time, talent, and treasure—all three are needed. But in terms of scaling some of the very, very best ideas, I mean, anybody out there wants to volunteer to teach Aristotelian ethics in their local delinquency center, there's ways to learn how to do that.

And I will promise you, Jordan, the people that choose to—it's what you do for a living, by the way—but the people who do that will find those days to be the most fulfilling of their lives—the days they're going to come home and just say, "I did something today." You said something that I wrote down at the ARK conference in London, which is that there is no difference between thinking about ourselves and being miserable—to the extent that we're focused on ourselves and our own needs and our wants—literally, that is the recipe for human misery.

You want to actually be non-miserable? Then operate with the third pillar of Catholic social teaching, which is solidarity. We are our brothers' and sisters' keepers. And by the way, I put in that same category civility. I think it's very, very, very possible for all of us to contribute to a greater culture of civility. And that means being better listeners as a start and trying to respond to—I’ve had my niece, the one that I worry about not wanting to have children, I think she’s changing her mind.

Come to my lectures and read my—and just say, "Please, you know, Claire, criticize me. What did I do wrong? Tell—tell me what is—did you have a chance to read this? Did you see this?" And I can't give up. You know, I can't—I can't—I can't give up, Jordan. It would be wrong for me to give up, and it's wrong for any of us to give up. Abraham didn't give up, did he?

So this 1.6.1—one is numeric; 6 is alphabetic. I also have my own book "Sustainable," which was endorsed by Pope Francis, and Larry Fink wrote the foreword that talks about these dozens of these Exemplars of Hope just as examples and also provides this criticism of the ESG, which I'm not going to leave. I believe that we would be better off just abandoning the whole project—moving on from acronym-based investing.

Remember the BRICs? We were supposed to only invest in the BRICs for a while—Brazil, Russia, India, China. Well, that's not the right investment strategy. Then there was the FANG—Facebook, Alphabet, Netflix, Google—that made no sense anymore.

So we just—we need to move on from ESG, understand that it was well-intended, but that there's better solutions. There's better ways for us to achieve greater inclusivity; there's better ways for us to achieve greater sustainability. And I put it another fine point on this: I think B corporations—you probably know what B corporations are—are these corporations that promise to operate in very strict ethical rules, very strict environmental rules.

I say, great, working for a B Corporation is wonderful; it leads to a great conscience. Just don't have any of those in your 401(k) because you won't be able to retire.

Yeah, well, what that shows is that what happens is that the appearance of moral effort is substituted for actual moral effort. And that's why those companies underperform. Like, what—one of the things we should point out to people who are watching and listening in keeping with what you just said is that there is no magic bullet to invest.

It's no simpler