Abstract: In the current ESG debate, one leading theory argues that diversified investors have a financial incentive to reduce negative corporate externalities, such as greenhouse gas emissions, because they internalize those externalities within their investment portfolio. This Essay examines how this “portfolio primacy” theory interacts with the multiple layers of fiduciary duties of investment and corporate managers. Using a hypothetical emissions reduction in ExxonMobil as a paradigmatic case, I show that portfolio primacy creates a fiduciary deadlock: a situation in which multiple fiduciary relationships—between investment advisers and fund investors, between corporate managers and shareholders, and between controlling and minority shareholders—come into conflict with each other. I argue that, within the existing structure of fiduciary law, portfolio primacy will prove ineffective in promoting ambitious social and environmental goals. Indeed, the only way to solve the fiduciary deadlock is to abandon the central tenet of portfolio primacy.