Critics of the ESG trend blame the gargantuan investment-management companies — BlackRock, State Street, Deutsche Bank, and Northern Trust, to name a few — for imposing the ESG regime through ratings and proxy votes. A recent study by the Committee
to Unleash Prosperity concluded that “dozens of major investment houses are routinely violating that legal obliga- tion” to represent the best interests of their investors, a legal principle known as “fi duciary duty.” Oklahoma GOP Sen. James Lank-
ford remarked on Newsmax TV: “ESG is not driven by the market. This is the political preference of the left saying they want to compel everyone to be involved.” One growing infl uence
in corporate boardrooms: seven-fi gure CEO perfor- mance bonuses based on achieving ESG goals. The Conference Board
could possibly benefi t its bottom line. Soon, the fi duciary duty issue will be
tested in court. Tesla’s Elon Musk predicts “woke”
fi rms will soon face investor law- suits. Major legal actions are already underway: In New York, former U.S. Secretary
Environmental Social
DEI Inclusion ESG
Diversity Equity
reports 73% of corporate CEOs are now incentiv- ized to meet ESG goals. That naturally tends to infl uence their priorities. Investment fi rms argue that focus-
Governance
of Labor Eugene Scalia fi led a law- suit on behalf of public-sector workers against the state’s pension funds. The funds had refused to invest in fossil fuel-based energy companies, which are among the nation’s top performing companies, based on ESG guidelines. An alliance of 17 GOP state attor- neys general filed a motion with the Federal Energy Regulatory Com- mission, disputing wheth- er BlackRock should be permitted to buy over $10 million in utility compa- ny stocks. The state attor- neys general don’t want BlackRock to impose ESG requirements on utilities. Also, 25 state attor-
ing on greenhouse gas emissions, or how many environmental crusaders are on a company’s board of directors, is actually good for a fi rm’s long-term profi tability. ESG opponents say that’s hogwash.
They point to ExxonMobil’s decision to give in to ESG activists by appointing two climate activists who have called for an end to fossil fuels to its board. Considering that the company
made more than $100 billion on fossil fuels annually, it’s hard to see how that
neys general have sued the Biden administration’s Department of Labor for rulings that give investors a greater legal leeway to consider ESG factors in their investment decisions. Private litigation has also been launched. One example: A commer- cial jet pilot has fi led a class action lawsuit against American Airlines, Fidelity Investments, and others for violating the Employee Retirement Income Security Act. The lawsuit states the companies made 401(k) investment decisions based on ESG that didn’t pan out. Moore thinks many CEOs whose
BlackRock Boss ‘Ashamed’ L
FINK
Elon Musk: ‘ESG Is a Scam’
T
he key to getting high environmental, social, and corporate governance (ESG)
ratings is to kowtow to the liberal agenda and add progressive board members. But when the investment rating firm S&P
recently gave electric car company Tesla a sub-par ESG rating, the tech entrepreneur and world’s richest man went public. Elon Musk slammed ESG as “the devil.” S&P gave Tesla, a firm obviously
dedicated to reducing carbon emissions, a moribund 37 out of 100. That was far lower than Philip Morris International, the purveyor of Marlboro cigarettes, which scored an eye-popping 84.
So how could a company that makes cigarettes be rated socially redemptive? Musk noted it was part
of a pattern: Other tobacco companies also rated higher than Tesla, and petroleum
giant ExxonMobil made the top 10 of the world’s most socially beneficial firms.
“ESG is a scam,”
tweeted Musk. “It has been weaponized by phony social-justice warriors.” — D.P.
companies are promoting ESG are liv- ing in a bubble. He says they delegated those matters to junior executives and are only now recognizing their serious fi nancial exposure. The Trump administration issued
an anti-ESG rule in 2020 that required investments to be based on “pecuniary factors” only. But in 2022, the Biden administration issued a more ESG- friendly regulation that said ESG fac- tors could be considered.
leadership, reports Axios. “When I write these [investment] letters, it was never
arry Fink, the billionaire CEO of BlackRock, which manages $9.2 trillion in assets, says he’s no longer using
the term ESG because it is being politically “weaponized” and he’s “ashamed” to be part of the debate on the issue. Fink has been a major proponent of factoring in climate change risks to investing strategies and corporate
meant to be a political statement. They were written to identify long-term issues to our long-term investors,” he told a conference in June. “I do believe in conscientious capitalism, but I’m not
going to use the word ESG because it’s been misused by the far left and the far right,” he added.
AUGUST 2023 | NEWSMAX 15
FINK/JOEL SAGET/AFP VIA GETTY IMAGES / MUSK/AP IMAGES
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