The term itself is opaque; ESG brings environmental, social, and governance causes together under one umbrella. The environmental component includes things such as transitioning to wind and solar energy from fossil fuels, and to electric vehicles from gasoline-powered cars.
The Origins of ESG Ideology
The ESG movement is a derivative of the United Nations Sustainable Development Goals (SDGs). There are 17 SDGs in all, ranging from “no poverty, zero hunger, and good health” to “responsible consumption and production” and “peaceful and inclusive societies for sustainable development.”
The manifesto declared that “a company is more than an economic unit generating wealth. It fulfills human and societal aspirations as part of the broader social system.”
During the annual meeting, Schwab told the gathered corporate executives and world leaders, “Let’s be clear, the future is not just happening; the future is built by us, by a powerful community here in this room. We have the means to improve the status of the world.”
“Accelerating the transition to net zero requires significant collaboration and shared responsibility between the private and public sectors.”
Signatories of the letter included Coca-Cola, Dell, Hewlett Packard, Microsoft, Nestle, PepsiCo, Siemens, Sysco, and Unilever.
Author and political analyst Michael Rectenwald told The Epoch Times, “This is a massive campaign that has already metastasized to almost all of the corporate world. The tentacles of the WEF extend to almost every sector of society.”
More than 500 of the world’s largest corporations have signed pledges to support ESG goals across industries including banking, insurance, asset management, tech, media, energy, manufacturing, and transportation. These pledges are signed as part of membership in international clubs like Climate Action 100+, the Glasgow Financial Alliance for Net Zero, the Net Zero Banking Alliance, and the Net Zero Asset Managers Alliance.
There’s no segment of the U.S. economy that’s outside the reach of this movement.
From its origins in U.N. think tanks and WEF conference rooms, ESG is then passed down to the corporate world via Wall Street, marketed as an investment strategy for companies to follow—voluntarily or involuntarily.
ESG in Practice
In principle, ESG means that companies look beyond making profits and consider higher political and moral issues, such as the welfare of the planet; in practice, it means that corporations become political agents for left-wing causes. This concept is also called “stakeholder capitalism,” which has been endorsed by CEOs across the corporate world.Speaking for Bank of America, Moynihan said, “Our research shows that companies that do well on ESG end up doing better ... It defines capitalism the way that people want to define it, which is stakeholder capitalism and solving the big problems of the world.”
In accordance with ESG principles, stakeholder-oriented banks such as JPMorgan Chase refused to lend to oil drilling companies in Alaska. Delta Air Lines, Coca-Cola, and Major League Baseball fought against voter ID laws in Georgia that they claimed were racist.
As part of the U.N. and ESG goals to reduce shootings, banks including Citibank restricted lending to the firearms industry. Credit card companies Visa, Mastercard, and American Express began tracking purchases from gun shops.
A Money Machine That Spans the Globe
ESG isn’t just an ideology; it’s also an industry. ESG investment funds and other assets have rapidly grown over the past decade to reach a current $55 trillion worldwide. ESG assets are projected to grow to $100 trillion by 2025.To put this in perspective, the gross domestic product (GDP) of the entire United States is currently about $21 trillion. The ESG industry is enormous and pervasive; it’s lucrative; and it has created a broad network of vested interests—consultants, rating agencies, accountants, investment managers, and proxy agents—to bring agnostics into the fold. Often, the companies that impose ESG ratings on companies, countries, and even U.S. states, also provide paid consulting services to help them improve their ratings.
The main drivers of the ESG movement are Wall Street banks and investment funds, which control the capital for the world economy. The three largest asset managers, BlackRock, Vanguard, and State Street, together control more than $20 trillion in assets under management. Because they manage index funds, they own shares in most corporations that are included in market indexes like the S&P 500.
“If you just look at BlackRock by itself, it’s the first, second or third largest shareholder in 80 percent of the companies in the S&P 500,” Andrew Puzder, the former CEO of CKE Restaurants, told The Epoch Times. “They use that tremendous voting power, not only to advance this economic leftist agenda, but to put it above their obligation to generate returns for their investors.”
BlackRock, State Street, and Vanguard didn’t respond to requests for comment.
Will Hild, executive director of Consumers’ Research, told The Epoch Times that “the way that these fund managers use ESG to push progressive politics is multifaceted. The first and probably the most public way is they get to vote the shares that they’re managing.”
“The more quiet, sort of less public way is that they have what they call engagement meetings with corporate leadership on these issues,” Hild said. “And when they show up, they don’t say: hey, we’re just representing ourselves, they say we represent ownership of 7.5-20 percent of your publicly traded shares. BlackRock, State Street, and Vanguard together would be the largest shareholder in 90 percent of the S&P 500.”
“If you read his annual letter to CEOs, Larry Fink actually thinks he needs to tell the world’s CEOs every year what BlackRock thinks,” Puzder said. “He doesn’t have to go to every shareholder meeting, he just tells them what to do in a letter. And the letter the year before last said we need to get to net-zero carbon emissions by 2050, which will require a transformation of the entire economy.”
Other financial institutions that have pledged support for the ESG movement include Bank of America, Citibank, Goldman Sachs, JPMorgan Chase, Morgan Stanley, Wells Fargo, HSBC, Deutsche Bank, and UBS. And in pledging fealty to ESG goals, corporations are not only aligned with each other, but with governments, as well.
“It’s now becoming increasingly difficult to tell where the private sector ends and the government begins,” Alex Newman, CEO of Liberty Sentinel Media, told The Epoch Times. “We’re seeing a merger of the two.”
JPMorgan Chase, Citibank, Goldman Sachs, and Morgan Stanley also didn’t respond to requests for comment.
“In my experience, large Wall Street banks are not charitable institutions,” Vivek Ramaswamy, entrepreneur and founder of Strive Asset Management, told The Epoch Times. “You look at which firms are rewarded with government packages, like who gets the COVID-19 stimulus packages; a lot of that flowed through BlackRock.”
Tom Jones, president of the American Accountability Foundation, told The Epoch Times: “What we’re seeing is a new revolving door in Washington. We’re seeing liberal activists, whether they’re in the administration or on Capitol Hill, instead of leaving those positions and going to K Street to become lobbyists in Washington, what we’re seeing now is they’re going to Wall Street. And they’re using the enormous influence that these Wall Street firms have to really drive policy at the state and local level in a way they haven’t done before.”
Brian Deese, for example, who’s the current National Economic Council director, was global head of sustainable investing at BlackRock, Hild noted.
“And you have Tom Donilon, who’s now been put in charge of a significant portion of our foreign policy, vis-à-vis China. And again, he comes right out of BlackRock and it’s going down the line.
A Democratic Deficit
What’s most striking about ESG is how, in joining corporations with government under a common cause, it has created a new power structure that often supersedes national laws and overrides the Constitution. Working in collaboration with government agencies, corporations have engaged in enforcement, censorship, and warrantless surveillance, often doing what the government is legally prohibited from doing.Some believe that this public–private alliance, which overrides democratic institutions, is necessary because the crises that humanity are facing—including climate change and racism—are so dire.
“The climate crisis is about human security, economic security, environmental security, national security, and the very life of the planet,” President Joe Biden said in his speech at the U.N. COP27 summit on Nov. 11.
Calling for a “sustainability revolution” at the COP27 conference, former Vice President Al Gore condemned “the culture of death that surrounds our addiction to fossil fuels by digging up dead life forms and burning them recklessly in ways that create more death.”
But others are wary about this concentration of power and authority in so few hands, and the public’s loss of a voice or vote in such major decisions about the future.
“How you address racial inequity or global climate change, these are important enough questions that we should resolve them through free speech and debate in the public square by putting people into public office who are accountable to the American electorate. Companies are not accountable, BlackRock is not accountable, Larry Fink is not accountable,” Ramaswamy said.
“This is the heart of the question that was an issue in 1776, where we said for better or worse, citizens decide how to settle these common political questions through the political process where everyone’s voice and vote counts equally.”
New York University Finance Professor Aswath Damodaran told the Prague Finance Institute in November 2021: “Do you really want Larry Fink and Jamie Dimon deciding what’s good or bad for the world? You’ve outsourced what should be your responsibility as a voter, as a citizen, to CEOs of companies. Nothing good has ever come of doing that.”
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