Climate activists are pursuing increasingly extreme measures to fight for environmental policy changes. In recent months, activists have vandalized works of art around the world, defaced public and private property, and disrupted Wimbledon.

These protests, sometimes called “eco-vandalism,” have led many to believe climate activists are going too far. A less flashy but perhaps more troubling trend has been the embrace of environmental, social, and governance (ESG) standards, which claim to use investment strategy to address societal challenges but similarly go too far in harming the developing world.

For many policymakers, activists, and investors, inequality is exactly the type of social issue ESGs are meant to address. ESGs, however, foster greater inequality by making the rich richer and the poor poorer. While this may seem counterintuitive, it’s not surprising when we look at data from around the world.

Take Sri Lanka—this developing nation scored very highly on the environmental components of ESG standards. But in 2022, the government faced a coup and massive protests due to food and fuel shortages spurred by a lack of development. By overemphasizing environmental factors and neglecting economic growth, ESG investing hurts the poorest members of their society. Protests in the Netherlands point in a similar direction, where farmers have seen their livelihoods threatened by new environmental policies.

The continent of Africa stands as a stark reminder of what we stand to lose by embracing erroneous ESG standards. As more African nations and people strive for a path to sustainable development and flourishing, international treaties and alliances threaten to rob them of their opportunity for growth. All developed nations have relied on cheap and abundant energy to achieve economic growth, but they are now threatening to close the door behind them and leave Africans in the cold. Climate activists argue that because Africa is at greater risk of climate-related events, it is in their best interest to forgo abundant energy sources. This ignores the fact that without propane, between 1-2 million women die each year from indoor air pollution caused by cooking with charcoal or biomass.

Africa has some of the highest levels of inequality and societal challenges, but it is also one of the most exciting and opportunity-laden regions in the world. Rather than addressing these challenges, ESG investing worsens inequality and creates a troublesome double standard by which some nations continue to prosper while withholding the benefits that come from cheap and safer fuel from the people who need them most.

We propose a new ESG investment strategy focused on equality of opportunity, shareholder value, and growth.

Entrepreneurship and business creation are the ultimate tides that lift all boats. Everywhere in the world, employment is the main way people can climb the income ladder. A dynamic economy fosters greater opportunity by providing more employment prospects, more goods and services to society, and diverse paths to flourishing. To support entrepreneurship and dynamism, we need to remove barriers to business creation and innovation. We need to help places like Africa access affordable energy to spur high levels of economic growth. Equality of opportunity leads to less international inequality and more social mobility.

When it comes to shareholder value, we don’t want to engage in the wearing discussion that says companies must choose what to care about most: people or profit. We are more partial to the notion that businesses and entrepreneurs exist to fulfill market demands or find solutions to pressing problems. This imbues entrepreneurs and workers with a sense of meaning and purpose.

Companies that care about shareholder value are worried about the long-term value of the business, not just short-term profit. And when they are worried about the long-term value of the company, they focus on creating opportunities for their employees and providing goods and services that both improve their bottom line and serve others in society. Long-term shareholder value is aligned with the idea that businesses create value for themselves and for society.

Finally, and maybe most important, growth matters. As research and data clearly show, economic growth and economic development lead to less environmental degradation, less energy consumption, and better adaptation to climate change. Instead of strong-arming developing nations to get on board with the climate agenda, developed countries should help promote the type of growth that will eventually lead to less pollution and better environmental standards. Developed countries can do this by removing barriers to trade, reducing aid that destroys local markets and opportunities for work, and stopping foreign aid that contributes to corruption and bad governance by undemocratic regimes.

A new investment agenda that embraces equality of opportunity, shareholder value, and growth will lead to more international development, less inequality, more social mobility, and increased human flourishing. It will also lead to better environmental conditions, fewer societal problems, and improved governance.

ESG investing has gone too far. The time to change direction is now.

Gonzalo Schwarz serves as president and CEO of the Archbridge Institute.

Magatte Wade is founder of SkinIsSkin.com; senior fellow, African Initiatives at Atlas Network; and a board member of Conscious Capitalism, Inc.

The views expressed in this article are the writers’ own.