Capital Calls: ESG handcuffs

4 minute read
Register now for FREE unlimited access to

NEW YORK, April 20 (Reuters Breakingviews) - Concise insights on global finance in the Covid-19 era.


INCARCERATION ARBITRAGE. Running prisons for profit raises moral questions. That makes companies like CoreCivic (CXW.N) and GEO (GEO.N) and their financiers fair game for environmental, social and governance activists . Barclays (BARC.L) has discovered that the opprobrium isn’t easily avoided, even when there are a couple of degrees of separation between the bank and the activity in question.

Register now for FREE unlimited access to

Along with other big lenders, the UK bank said two years ago it wouldn’t finance private prisons. Yet it just pulled out of underwriting a municipal-style debt deal for two facilities in Alabama, according to Bloomberg. In this case, while the owner would be CoreCivic, it’s the state that would have operated them. The move followed the embarrassing termination by the American Sustainable Business Council and Social Venture Circle of the bank’s membership.

Critics targeted not only CoreCivic’s role but also Alabama’s deficiencies running correctional services – failures that brought a lawsuit from President Donald Trump’s Department of Justice. They took further issue with the bonds being issued via the Wisconsin-based Public Finance Authority, a governmental entity that has now also dropped out, according to the Wisconsin Examiner. It’s becoming harder to hide from the ESG police. (By Richard Beales)

On Twitter

Earlier in Capital Calls:

UK grocery LBO can apply pain-free salve read more

French M&A risk makes Atos a tricky short read more

U.S. regulatory cloud chocks tobacco stocks, again read more

Meat giant JBS avoids plant-based indigestion read more

Tencent’s loud ESG pitch may fall on deaf ears read more

Register now for FREE unlimited access to
SIGN UP FOR BREAKINGVIEWS EMAIL ALERTS: <a href="" target="_blank"></a> | Editing by John Foley and Amanda Gomez

Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.

Sign up for a free trial of our full service at and follow us on Twitter @Breakingviews and at All opinions expressed are those of the authors.

More from Reuters