Not only can Citi afford to sponsor the New York Mets’ new stadium (an offense to my sensibilities as a Yankees fan), but they can apparently afford to spend $50 billion on green projects over the next ten years (offending my sensibilities as a free-marketeer):
Citigroup will on Tuesday commit to providing $50bn (£25bn) to environmental projects during the next decade in Wall Street’s boldest statement of the business risks and opportunities presented by climate change.
The world’s largest financial services group will commit to increase 10-fold to $10bn its planned investment to reduce its own greenhouse gas emissions.
It has also begun to advise borrowers about how to make their projects more environmentally sustainable to reduce their risk from future environmental regulation.
Whether I’m talking about using my credit card or investing money, I see no reason not to demand the best return on my dollar. If Citi can afford to sacrifice profit maximization in favor of sustainable development, perhaps they’re making too much money off of my business. As the late great Milton Friedman said:
What does it mean to say that the corpoÂrate executive has a “social responsibility” in his capacity as businessman? If this statement is not pure rhetoric, it must mean that he is to act in some way that is not in the interest of his employers. For example, that he is to refrain from increasing the price of the product in order to contribute to the social objective of preventing inflation, even though a price increase would be in the best interests of the corporation. Or that he is to make expendiÂtures on reducing pollution beyond the amount that is in the best interests of the corÂporation or that is required by law in order to contribute to the social objective of improving the environment. Or that, at the expense of corporate profits, he is to hire “hardcore” unÂemployed instead of better qualified available workmen to contribute to the social objective of reducing poverty.
In each of these cases, the corporate execÂutive would be spending someone else’s money for a general social interest. Insofar as his actions in accord with his “social responsiÂbility” reduce returns to stockholders, he is spending their money. Insofar as his actions raise the price to customers, he is spending the customers’ money. Insofar as his actions lower the wages of some employees, he is spending their money.
Maybe I need to look for an investor who’ll maximize my profit and let me decide what to do with it.
