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Have we reached peak ESG? Ethical capitalism no longer pays the bills

Can we trust BlackRock? Lionel Bonaventure/AFP/Getty Images.

Can we trust BlackRock? Lionel Bonaventure/AFP/Getty Images.


December 27, 2023   6 mins

On 4 June, 2004, Kofi Annan ascended the dais at the Assembly Hall to conclude a meeting that would leave an indelible mark on the world for the next two decades. There, speaking to nearly 500 global decision makers in attendance, Annan spoke in soaring rhetoric about a new paradigm for government, business and social leadership. A new era of hope was ushered in.

Almost 20 years later, the first Global Compact Leadership Summit is considered the birthplace of the ESG movement, a kind of constitutional convention for global “governance”. Annan had been championing this new approach since at least 1999, when, at the World Economic Forum in Davos, he announced the creation of “a global compact of shared values and principles, which will give a human face to the global market”. The aim would be to create a “compact” of agreements that could keep up with the radical change being wrought by globalising markets. It would, of course, do much more than that.

Since Annan’s proclamation, ESG has morphed into a social and corporate inevitability. Its manifestations are evident everywhere — from academia’s heady embrace of Diversity, Equity and Inclusion initiatives to the corporate world’s collective gush over protecting the environment, preventing racism and advancing whatever else might be the “current thing” of international righthink.

Its rise appeared unstoppable — until 2023 arrived. Only this month, Republicans in Congress announced they would subpoena BlackRock, the asset management firm most closely aligned with ESG, and State Street, another Fortune 500 financial heavyweight, to investigate whether their ESG policies violate anti-trust law. Days after that news broke, the state of Tennessee announced it was suing BlackRock for making what it called “misleading” statements about ESG.

For its part, BlackRock — undoubtedly the greatest champion of ESG — is retreating, backing “just 7% of environmental and social proposals at companies’ annual meetings in 2023 proxy season, down from 47% two years earlier,” according to the Financial Times. In the UK, signs of a brewing backlash are just as evident. The Confederation of British Industry (CBI), a major lobbying group, has hired Rupert Soames, a critic of ethical investing, as its next president.

For some, the pivot away from ESG may come as a shock. But the reality is that the equilibrium has been shifting for more than a year. One of the strongest indicators that all was not well with ESG came from the most unlikely of places: the annual letter from ESG’s most high-profile supporter. Larry Fink, chairman and CEO of BlackRock, began publishing his letters to shareholders and CEO in 2012 in which he introduced ESG-speak into the halls of capitalism. But this year, Fink told the Aspen Ideas Festival that he’s no longer using the term since it’s been “weaponised” by critics. And ESG was notably absent from his 2023 letter in March. This might be no more than a symbol of the influence of ESG. But in the context of a decade during which the acronym was proclaimed as a shibboleth of a new kind of global corporate power, one whose proponents construe profit-seeking as a means to an end, that end being nothing less than improving the lot of mankind, it is nevertheless significant.

It’s not hard to see why ESG won broad, even fervent, appeal in its early days. By the mid-2000s, American capitalism had begun to resemble its own caricature. The global economy of the late Nineties and early 2000s was defined not just by excess, but by excessive scandal: the ruinous “privatisation” of Russia; the triple header of Enron, Long Term Capital Management, and Bernie Madoff; and in the background, an Iraq War architected by the former CEO of a major oil industry services company. And then came the mother of all scandals: the 2008 Financial Crisis.

Today, with the media tightly aligned with ESG-embracing Big Business, it’s easy to forget how antagonistic the press was to large companies in the early and mid-2000s. “Transnational corporations” became a go-to epithet insinuating a cartel-like form of legalised corruption; financiers became objects of derision; films such as The Big Short, Arbitrage, Erin Brockovich and Thank You For Smoking highlighted corporate malfeasance.

The emergence of ESG may have been rooted in a genuine desire to do better. It’s hard to argue with calls, such as that of Brazilian president Lula da Silva at Annan’s 2004 Global Compact Leadership Summit, to see global leaders “engaged in a campaign to free all human beings from hunger”. The same holds true for preserving the natural environment and sharing the benefits — not the externalities — of corporate progress. After all, who doesn’t want a better world?

The problem with ESG, however, is that the practice didn’t match the theory. While ESG set out to make a difference, it ended up becoming a way for Big Business to flip the mass of negative attention into a positive, highly appealing ethos. ESG was all about upholding human rights and ensuring the planet didn’t get incinerated at the altar of ruthless capitalism. This meant that if you were against ESG, you were against ethics itself. And if you opposed the prerogatives of the Big Business espousing ESG, you were a heartless devotee of shareholder capitalism. This binary attitude suited firms such as BlackRock, which depend on, and compete fiercely for, a continuous inflow of fresh capital to invest. If BlackRock could successfully make the case that (a) your firm is the standard for ethical investment and (b) every other approach is so inefficient in the long term that it’s functionally corrupt, then the conclusion regarding which firms get the money is foregone. In other words, BlackRock found a way to win.

In the decade since Larry Fink began writing his letter to shareholders, in which he championed ideas such as “corporate governance and responsible investment”, BlackRock’s market cap quadrupled. The company now has $9 trillion under management, a testament not only to Fink’s financial genius but also to his unparalleled access to global leaders who make decisions at the billion-dollar level.

Fink, as a result, became a darling of the Davos set — and it was there that, in January, he chose to make another ESG confession, this one vastly more significant. At the WEF, he admitted that his firm’s close association with the ESG movement had cost BlackRock an estimated $4 billion in managed assets. While for many (if not most) asset management firms, this would be a fatal blow, it’s in fact a mere trickle lost in BlackRock’s financial ocean. But it’s also a headline. And, no matter how you spin it, it’s a loss — one that could spell the start of a devastating longer-term trend.

But there was another, more overlooked signal that all was not well with ESG. When Fink released this year’s ESG-free letter, it contained a second omission: in previous years, Fink wrote one letter to CEOs and a separate one to investors. This neatly reflected the concept of “stakeholder capitalism” at the heart of ESG, which calls for equal consideration of all the people involved in a company’s ecosystems, including employees, customers, and the public, not just its shareholders. But this year Fink wrote only a single letter — to investors. Was Fink signalling a retrenchment, a return to the unglamorous, nuts-and-bolts endeavour of shareholder capitalism?

The idea of stakeholder capitalism is attributed largely to Klaus Schwab, creator and chairman of the World Economic Forum, who began spreading the idea in a 1971 study he co-authored called “Modern Company Management in Mechanical Engineering”. This top-down approach to shaping how wealth is created, and in whose hands it ends up, played well to a media educated in America’s Marxism-infused liberal arts colleges. And the business crowd loved it too. Suddenly, bland business conferences felt less like trade conventions and more like geopolitical summits. You weren’t merely investing in funds, selling widgets, or cooking up ever more optimised ads. You were saving the world.

By 2021, ESG had reached its peak not just of influence but power. The pandemic seemed proof of the urgency of its policies. Endlessly, we heard that Covid was a result of mankind “encroaching” on nature, squeezing it until this abstract entity struck back. We were informed that cooperation was essential and non-compliance not an option.

But ESG’s recent victories are now starting to look pyrrhic. In 2022, Texas led a red-state boycott of BlackRock, announcing plans to pull more than $3 billion out of BlackRock funds. Since then, Republican state legislatures, including those in Florida, Kansas and Idaho, have passed laws that ban or limit the consideration of ESG.

In an even more existential blow to the ESG vision, money has become expensive. During the era of Zero Interest Rate Policy, there was enough cheap money, and enough margin, to sacrifice some of it for the sake of a good cause. But when money is tight, consumers are jittery, and investors running scared, companies take what they can get.

The cultural backlash underway is even bigger. In April, it only took a single misfired influencer outreach effort by Bud Light, which sent cans of beer to Dylan Mulvaney as part of a DEI-guided, trans-friendly campaign, to knock the brand from its top spot in American beer sales, carving 13% off its revenue. Even the Magic Kingdom has not escaped unscathed. After its battle with Florida Governor Ron DeSantis, among the most vocal opponents of ESG in American politics, Disney is now at its most vulnerable in decades, having seen billions in shareholder value wiped away and its once-pristine brand tainted by political controversy. There is no reason to think the trend will slow.

If there is one thing businesses and markets hate, it’s uncertainty. And ESG is starting to look like another unnecessary risk — more so given that ESG has become a valuable political leverage point for politicians looking to ride the surge of populism. This doesn’t mean ESG is done: one of the major problems identified by its critics is the extent to which it has embedded in vital institutions. But we may be at a turning point, and if the risk rises higher, and there is no substantial reward to follow, ESG might find itself on the corporate chopping block.


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Daniel P
Daniel P
6 months ago

There is nothing intrinsically “wrong” with stakeholder capitalism. In fact, stakeholder capitalism is, in the purest sense, a return to a healthier form of capitalism, a type of capitalism that existed before “shareholder primacy” came to the forefront in the 1980’s, a more socially sustainable version.
But, just as shareholder primacy has proven to be a recipe for a vicious, ruthless, inhuman, version of capitalism, one focused more on extracting value than in building good businesses, so ESG went too far. It went beyond simply the idea of managing a businesses relationships with its employees and other stakeholders, to a social movement that went way beyond what the average person could comprehend or empathize with and at a cost that they were not willing to pay, such as Net Zero.
ESG was never really about stakeholders, it was about slapping lipstick on the pig of globalization and justifying the ever increasing power of authorities like the EU. It was about corporations like Black Rock trying to control those authorities to their own benefit. The whole social consciousness crap was a cover.

Steve Jolly
Steve Jolly
6 months ago
Reply to  Daniel P

Globalization was never anything but a scheme to replace high paid workers with low paid workers. The vicious, ruthless, inhuman version of capitalism was always there. It has simply been suppressed by force. When western populations passed laws and joined unions to prevent the worst abuses of the aristocrat class, a relative balance was achieved between the upper and middle classes whereby as long as both prospered, a great deal of inequality could be tolerated. This implied social contract held for most of the latter half of the twentieth century. Perhaps not coincidentally, after the fall of global communism, the aristocrats broke the contract. They started a trend of moving their factories elsewhere and then used ‘free trade’ orthodoxy and economic efficiency to pocket the money they were no longer having to pay in taxes to governments or wages to unionized employees. Wealth inequality, which had been relatively stable the first few decades after WWII, began rising again. It doesn’t take a political scientist or a genius to figure out what happens when the rich get richer and nobody else does.
The aristocrat class had to justify their exploitation. Hence, stakeholder capitalism, ESG, DEI, etc. They hoped that by casting themselves as benevolent custodians of civilization, carefully balancing profits against popular social causes, they could stave off the backlash that always accompanies widening wealth gaps. They never really believed in the causes. They thought enough people would accept a new tradeoff, a new social contract that involved advancing a select group of public causes in exchange for being allowed free reign to make as much money as they could wherever they could. It didn’t work. Sure, they duped a lot of impressionable sheltered children for a while with their nonsense, but age and experience bring perspective and even the slowest horse eventually crosses the finish line. When Larry Fink says that the term ESG has been ‘weaponized’, he means that people are seeing it for what it is, a poor excuse for unchecked greed, exploitation, and the destruction of the middle class. If it can’t serve as cover for the aristocrats, it really serves no purpose at all. I’m sure Larry and other smart people in the davos set are starting to realize they’ve lost and it’s time for the CYA stage of crisis management.

Last edited 6 months ago by Steve Jolly
Paul Ten
Paul Ten
6 months ago
Reply to  Steve Jolly

I would say this analysis is valid only from a narrow perspective. The rich become become richer, but it’s not the case that nobody else does. If you look globally, billions of people have been lifted out of abject poverty as a consequence of global capitalism. There are losers in western societies but even here the situation is more nuanced than suggested. Even the most avid critics of global capitalism enjoy smartphones, social media, cheap travel, better medicine and a host of other benefits that were unimaginable 30 years ago.

Ian Barton
Ian Barton
6 months ago
Reply to  Paul Ten

Some element of historical truth, but more recently, what used to be called the “working class” in the U.K. have been made considerably poorer by the globalist lobbyists (that drive the EU) ensuring free movement and lower wages in the U.K..

Last edited 6 months ago by Ian Barton
M Shewbridge
M Shewbridge
6 months ago
Reply to  Paul Ten

Yes, commodities are cheaper now. Try getting hold of an actual asset, such as a house, though. It’s the assets that matter, not the cheap toys.

Nardo Flopsey
Nardo Flopsey
6 months ago
Reply to  M Shewbridge

That’s like saying car ownership matters, not what petrol costs. They both matter. As it turns out, people get way more upset at small price shocks in oil, than the fact they must lease cars they can’t afford to buy. Funny that.

Michael Davis
Michael Davis
6 months ago
Reply to  Paul Ten

Is not global capitalism, we understand the aims and direction of capitalism. ESG tries to show that it is now stakeholder, where, in fact, the ESG rules are made by the same blob that used to be called “ the bosses”

Nardo Flopsey
Nardo Flopsey
6 months ago
Reply to  Paul Ten

That’s what the author forgot to mention when he implied that us plebes wish for a share in the benefits of corporate activity, rather than merely the externalities. When even the homeless have smart phones, a device that would have been easily worth its weight in gold 20 years ago, that is a clue that prosperity permeates all levels of society.

The plebes always assume that progress just happens automatically, and business causes externalities because it’s careless and perhaps evil. Just as they assume that poor people in developing countries are the passive victims of industrialization and pollution, without considering all the essentials of modern life they can afford to buy, because of the efficiencies of mass production.

It may have been the super villain Klaus Schwab who coined the term stakeholder capitalism, but it was effectively put into practice by John Mackey at Whole Foods, and quite effectively I would say. He also wrote a couple good books on “conscious capitalism”, with case studies of several companies who are actually creating the type of responsible business environment that Larry Fink supposedly advocates.

John Mackey has also talked very openly about being a libertarian, which his leftist admirers pretend not to hear, because the ESG movement is fraught with hypocrisy and grift, as well as political opportunism.

The nature of all government mandates to “protect” the public is that they create new methods for incumbent industry titans to erect artificial barriers to competition. We should stop pretending that’s a bug in the system, when politicians rightly see it as a feature. Where humans are involved in any sort of coalition, there will be crony collusion.

I’d rather see a voluntary ESG movement, led by people who genuinely care to try, than the faux environmentalism of WEF types who fly to climate conferences on private jets while trying to pull the ladder up behind them.

Last edited 6 months ago by Nardo Flopsey
Zorost Zorost
Zorost Zorost
6 months ago
Reply to  Nardo Flopsey

A homeless person with a phone and diabetes is hardly prosperity.
The fact that many people think $$$ and toys are the sole arbiter of prosperity is precisely why the whole structure needs to be burned down, starting with media and education.

Sisyphus Jones
Sisyphus Jones
6 months ago
Reply to  Zorost Zorost

Be cautious of anyone, while demonstrating a specious grasp of structures, calling for the total destruction of a structure as a solution to its structural problems.

Bret Larson
Bret Larson
6 months ago
Reply to  Sisyphus Jones

How do you plan to fix it?

Warren Trees
Warren Trees
6 months ago
Reply to  Paul Ten

And at least in the U.S., the poorest of people are obese.

Kat L
Kat L
6 months ago
Reply to  Warren Trees

That’s not prosperity, that’s processed food and cheap carbs.

Kate Martin
Kate Martin
6 months ago
Reply to  Kat L

Or stupidity, perhaps. We’re actually pretty good at producing stupid people.

UnHerd Reader
UnHerd Reader
6 months ago
Reply to  Kate Martin

Unfortunately, it works both ways. Malnutrition, i.e. lack of essential nutrients, is bad for your brain. Adding artificial vitamins to junk food is a trick to mislead uninformed people.

Jeff Cunningham
Jeff Cunningham
6 months ago
Reply to  Warren Trees

And more likely to be.

Steve Jolly
Steve Jolly
6 months ago
Reply to  Paul Ten

The things you mentioned are technological progress, barely related to economic outcomes. Even if those things were the result of globalism exclusively and nothing else, giving a man a car is no recompense for burning down his house. It isn’t the money so much as it is the political power. If the elites were willing to stop putting their billions on the political scales in favor of broadly unpopular policies and trying to use unaccountable ‘experts’ to replace democratically elected officials, a lot of this would go away. I see very little chance of this happening. More likely, they’ll rationalize what they do and dismiss their opponents out of aristocratic arrogance. I can’t emphasize enough how dangerous it is to keep doing this.

Which brings us to my favorite elite rationalization, the claim that ‘billions have been lifted out of poverty’. With all respect, the people who are angry about these developments do not care, because most of those millions are halfway across the world in another country. They care in the sense that they care about any other luxury cause, but not when it comes at their expense. In fact, they are now even angrier since the elite class shared benefits with foreigners rather than fellow citizens. Call them racists or whatever pejorative you prefer. It makes no difference. You might even be right, but so what. We all have to live in the world as it is, not as we wish it were. The reason we have populism rising everywhere is that a large swath of people did not, and will never, accept these excuses. Who’s right and who’s wrong is beside the point. The French aristocrats continued to believe they were right even as their lands were seized, their houses were burned, and even when they were marched to the guillotine. History does not care who is right and who is wrong.

If the elites want to keep globalism intact, there is a way it could happen, but it would involve a lot of personal sacrifice on their part. Bernie Sanders pretty much laid it out in his campaign in 2016. Wealth taxes, universal health care, an end to tax loopholes and tax shelters, penalties for companies that move overseas to dodge taxes, breaking up monopolistic enterprises that stifle competition, and so on. Those things would have gone a long way towards appeasing some of the anger. Instead, the elite class lined up behind Clinton, and then Biden, to defend the status quo at all costs. What can I conclude but that they are more concerned with protecting their wealth and power than with the billions they have lifted out of poverty or the several million angry blue collar workers who don’t want to work at McDonald’s or Wal-Mart. Any establishment types want to step up and bang the drum for unionization of the service industries so they can negotiate wages as factory workers once did? No? Didn’t think so.

Personally, I don’t much care one way or the other. I admit to being not a very sociable fellow and something of a reed who will bend whichever way the wind is blowing to my own advantage. You can tell which way the wind is blowing me at least. I see a lot of possibilities for the future, but none of them is the neoliberal global order as envisioned in 1991. That horse is dead, and no amount of beating on it will revive it. Whether it was good, evil, or neither, will be for future historians to debate. Whatever it has accomplished is at an end. Whatever it might have accomplished in the future will forever remain hypothetical. We are entering a period of transition, and all periods of transition have inherent dangers. I can’t speak for others, but I’d personally like to minimize war, death, and violence. I see the actions of many of our current leaders as they try to save a sinking ship leading to exactly those undesirable ends. Regardless of their intent, I’d like to see them change course and accept some compromises, making some sort of peace with the other side that can put some civility back into our politics and reduce the chance for escalating provocations that lead to greater levels of conflict. That’s my only real concern. Don’t shoot the messenger.

Last edited 6 months ago by Steve Jolly
Kat L
Kat L
6 months ago
Reply to  Steve Jolly

Excellent commentary.

H W
H W
6 months ago
Reply to  Paul Ten

‘Poverty’ is measured using measurements set by WEF types, like annual cash income and participation in GDP sector. Cash income may increase while actual wealth and well-being decrease. You get paid a few bucks to pick cash crops on foreign corporate mega farm, but there is no common land to graze your livestock, pick fruit, or fish, or live on. There may be a war or poisoned drinking water that harms you even if you cash income is higher.You get to pay rent in a slum and cannot own land individually or as a collective/tribe.

Andrew F
Andrew F
6 months ago
Reply to  Paul Ten

But Steve and my reply was about situation in the West.
Why should we care about Asians and Africans?
Do you think they care about us?
The benefits you described are result of scientific and technological developments.
They happened regardless of globalisation.
Reality is that majority of people in the West are worse off due to globalisation.
I retired as senior IT consultant but someone young in my position can not afford house which was available to manual worker in London in the 80s.

H W
H W
6 months ago
Reply to  Steve Jolly

Similarly, I recall checking the World Bank’s website about 10 years ago and finding that it was now dedicated to reducing global poverty. Photos of lovely African kids and mums were prominent. Has it truly repented of the poverty-inducing, wage-cutting, environment-destroying, ‘free-market’ “Structural Adjustment Programs” we had protested? Not.

Andrew F
Andrew F
6 months ago
Reply to  Steve Jolly

Great post.
I replied along the same lines before reading yours.
Yes, critical juncture is fall of communism.
Then parasites like Fink and others could flourish unopposed, at the expense of 90% of the Western society.
Still, what is to be done?
We had Keynesian model, which eventually failed.
To be replaced by Chicago School Reganomics which failed by 2008.
To be replaced by citizens funded “socialism for the rich” when profits are private but losses are public.
Which is unsustainable.
I am old and have no kids. I don’t envy people who are young with children.

Steve Jolly
Steve Jolly
6 months ago
Reply to  Andrew F

The populist tide has gained too much momentum now to be stopped. The best the establishment will be able to get is some kind of compromise that makes a lot of concessions to retain some of the old world, but other things are happening that bring the viability of globalism into question regardless of politics. Read the Post article about the US burning through million dollar missiles to shoot down hundred dollar drones to provide ‘freedom of the seas’. There’s something unsustainable, and that’s the lynch pin that holds up the entire system. I can’t see that keeping up for long at all before the other shoe drops and the providers of said security start charging for the protection or demanding certain political and economic concessions. If you want the US Navy’s protection, don’t trade with Russia. Don’t like it. Build your own damn navy. Those that can, like China/Russia/India, will do just that and those that can’t will have to pick sides in a multipolar world.
What we want is beside the point I think, because I’m fairly confident that what we’ll get regardless is some form of neomercantilism with trading blocs and different levels of trade and trust based upon political alliances that may shift over time. A lot of the domestic conflict will ease but international conflict will rise. That’s my best guess anyway.

Vicky Ladizhinskaya
Vicky Ladizhinskaya
6 months ago
Reply to  Steve Jolly

I don’t know who you mean by aristocrats considering the context but assume this refers to the Davis set. The fact that some people get much richer doesn’t mean the rest get poorer. There is a common misconception confusing inequality with poverty. In fact all over the Western world middle class didn’t shrink or become worse off in the last few decades. It just didn’t keep up with the wealth accumulation of the top 1%-5%, who in turn look enviously at the billionaires and see themsleves, with all their swanky houses and millions hard done by as well. Swiping envy for reality isn’t a healthy way to live.

As to Ethical investment. It is not very smart to put cultural wars causes in the same basket as the environment. Investment in electric cars and renewables is not only good for the planet but good for the pocket, definitely longer term, as Tesla sharehders can attest. The need for people to be for or against a conservative or progressive “baskets” of ideas kills neuance and common sense and doesn’t benefit anyone.

Steve Jolly
Steve Jolly
6 months ago

Yes I mean the Davos set, and forgive me, but I’ve heard all this before. So has everybody else. Geert Wilders just won an election in the Netherlands. Donald Trump, despite his manifest unfitness for office, despite his horrible behavior, despite the fact he’s a buffoon and an embarrassment to the nation, is polling ahead of Joe Biden. What more do people need to see before they realize that people don’t like the way things are going and want things to change. If you want to keep selling the globalist status quo, you’re going to have to come up with a better argument than this, a new plan of some sort. Calling the former factory workers who saw their livelihood disappear ‘envious’ is not good political strategy and strikes me as kinda stupid regardless. It’s just a poor debate tactic to insult those who disagree, or your opponents, or really anyone. Insults tend to make people angry, and angry people are less apt to be persuaded of anything. Further, when I say aristocrats, I’m not talking about people who just have money. I’m talking about people who use their money to wield power and advance themselves at the expense of other aristocrats or the common folk.
Ultimately, it’s not about money. It’s about power. People want to feel like they have some control over their own lives. Part of that is the human rights and freedoms we all agree on, left and right, like freedom of religion, expression, association, the right to protest and things like that. Another part of it is feeling that the government and the people in power are accountable to the people through elections or some other democratic mechanism, and that everyone is accountable to the laws. Right now, there’s a perception, fair or not, that organizations such as multinational corporations, big banks, and international organizations like the WFO, WHO, IMF, etc. have a lot of power, but are not accountable to voters. There’s also a perception that corporations are no longer accountable to the law because if they don’t like the environmental or labor laws of one country, they simply move their factory to somewhere they do, creating a ‘race to the bottom’ if you will between countries trying to lure businesses.
The law is important, and accountability to the law is important. If I rob a bank, I will be prosecuted and go to prison. An illegal immigrant breaks the law and gets…. sympathy and apologies. People see immigration law being broken and they see a lack of respect for the law. The fact is that the people in charge of immigration enforcement at the moment would like to change the law to allow free movement, but they know people won’t support that, so instead of changing the laws, they just ignore the problem, so now it looks like the government has no respect for its own laws. If the government won’t enforce the laws they don’t like, why should I obey the laws I don’t like? Most of us don’t want to live in a lawless society, but in order to have a law based society, the law must be perceived as something fairly debated, fairly implemented, and fairly enforced. If people in power are simply dodging the laws they don’t like or ignoring them, we aren’t very far from having a society where nobody respects the law.
People are vengeful. If someone does wrong, they want to see that person punished for it. If a bunch of bank failures causes a recession, people want the owners and executives of said banks to suffer for that. They don’t want the banks bailed out by the government because ‘that’s better for everyone’, even if it is. Somebody should lose their fortune. If they broke the law, they should go to the same prisons that everybody else goes to, not get to pay their way out of it. The narrative is important. People see the villains escaping. People will cross a lot of lines if they someone they think is a villain on the other side. Ultimately, people will hurt themselves to punish that person. Don’t ask me why that is, but it’s something I’ve observed in humans.
This is where populism is coming from. The reason nativists and nationalists are winning lately is not because people suddenly like them or suddenly changed their values. It’s because those parties are perceived as more likely to pursue the sorts of policies they want, and they can live with the rest. There have been left leaning populists like Bernie Sanders, but they’ve been less successful. What can I say. The left hasn’t seized the opportunity in the same way the right has. I’d love it if they did.
Honestly, my personal prerogative is that I hate conflict and violence. I don’t really care how much money the aristocrats make or what they do with it, but I think what they’re doing right now is going to lead to conflict and violence. I think some reform is needed at the national and international level. Accountability needs to be restored. Respect for the law needs to be restored. Since there is no democratic global government, that also means borders need to be restored. When that happens, we’ll all be better off, and we can resume debating things that don’t matter and ignoring politics again.
For what it’s worth, I agree that no investment in technology and research is ever wasted, whether its on green technology or anything else. The space race was not much more than a pi**ing contest between the US and USSR, yet both sides spent ridiculous amounts of money on it. It accomplished some symbolic things, but didn’t benefit anyone very much. Yet, almost all the technology developed as a result of the space program found other uses. Long term, there is little that has a greater payout. I don’t really care for climate alarmists. The world isn’t going to end if there’s 2 degrees of warming or even 3 degrees of warming instead of 1 or 1.5. Yet, I tolerate it to an extent if it gets money spent on new technology research. As long as we’re not funding unscientific activist crap or crippling our energy supply, I’m good with green technology investments, or any other color to be honest.

Ethniciodo Rodenydo
Ethniciodo Rodenydo
6 months ago

 Investment in electric cars and renewables is not only good for the planet but good for the pocket, definitely longer term, as Tesla shareholders can attest. 
Electric cars and renewables are not good for either the planet or the pocket. They are only good for those that own the shares in the companies concerned who then pass laws to make u use them.
Tesla is a zombie corporation. It share price was sent rocketing by quantitative easing cash that had to find a home somewhere

Jeff Cunningham
Jeff Cunningham
6 months ago

Good comment.

Rob McMillin
Rob McMillin
6 months ago
Reply to  Daniel P

The core flaw of “stakeholder capitalism” is that it is a euphemism for people with nothing at stake telling those who do how to run their affairs. That is, it gives license to busybodies.

David Mayes
David Mayes
6 months ago
Reply to  Rob McMillin

busybodies and subversives.

Andrew F
Andrew F
6 months ago
Reply to  Daniel P

Great post.
All the globalisation and ESG concept is just the way to impoverish working and middle classes of the West to benefit people like Mr Fink.
When communism was around, people like Mr Fink had to pay attention to lower orders in case him and his mates would end up like former rulling class of Russia; basically dead.
ESG was basically window dressing to persuade miseducated, overproduced and underpayed graduate underclass of the West, that there are more important things than having home and chance of having family.
While flooding West with immigrant labour and non working migrants from Muslim countries and Africa to destroy Western society.
His current manoeuvre is just avoidance of responsibility for what he and his co-criminals created.

Andy JS
Andy JS
6 months ago
Reply to  Daniel P

The writer of this article doesn’t seem to be aware of Tony Blair and Robin Cook’s infamous “ethical foreign policy” approach from 1997.

Peter Dawson
Peter Dawson
6 months ago
Reply to  Daniel P

Let’s hope DEI goes the same way – which is looking increasingly likely!

Archibald Tennyson
Archibald Tennyson
6 months ago

What comes next will be truly revealing. If enough companies persist despite the losses, it will be definitive proof that the barbarians have indeed taken the citadel, and that the revolution (sorry, ‘Great Reset’) will proceed forthwith, with all attendant destruction and misery.

Let’s just hope there are enough sane, God-fearing people left to put an end to this madness. I pray that it is so.

Last edited 6 months ago by Archibald Tennyson
Right-Wing Hippie
Right-Wing Hippie
6 months ago

The only sane, God-fearing people left are me and thee, and I’m not so sure about me.

Kat L
Kat L
6 months ago

I’m here!

Amelia Melkinthorpe
Amelia Melkinthorpe
6 months ago
Reply to  Kat L

And me!

Warren Trees
Warren Trees
6 months ago

Me too!

Clare Knight
Clare Knight
6 months ago

“God-fearing”?! Have you created a god that you fear? Seems a bit self-defeating.

Richard Craven
Richard Craven
6 months ago

I’m an atheist, but respect religious faith and see religion as a force for good.

Right-Wing Hippie
Right-Wing Hippie
6 months ago

This neatly reflected the concept of “stakeholder capitalism” at the heart of ESG, which calls for equal consideration of all the people involved in a company’s ecosystems, including employees, customers, and the public, not just its shareholders.
Stakeholder capitalism, by diluting the power of any one pressure group, ultimately empowers and liberates the executive to pursue its own interests, a sort of corporate “divide and rule”.

Jim Veenbaas
Jim Veenbaas
6 months ago

Absolutely. CEOs are normally beholden to their shareholders. When the focus shifts to stakeholders, it can actually be anyone they choose.

Allison Barrows
Allison Barrows
6 months ago
Reply to  Jim Veenbaas

And this is what has happened to politics in the US. When once politicians were beholden to the voters, they now simply determine for themselves who will “win” elections. The voters no longer matter, corruption and scandal no longer ruins political careers, and only the criminals are above the law.

Warren Trees
Warren Trees
6 months ago

Quite right! In too many States, Congress picks their constituents by jerrymandering the districts, which makes elected officials no longer interested in representing the people, only lobbyists.

Kat L
Kat L
6 months ago
Reply to  Warren Trees

That’s been going on forever. You just never hear about it when democrats do it.

Vesselina Zaitzeva
Vesselina Zaitzeva
6 months ago
Reply to  Jim Veenbaas

One of the easiest ways for chosing the correct stakeholders is creating quangos (congos and gongos) and saying,
“This is what our stakeholders want. And these stakeholders are legitimate representatives of civil society/grassroots/people directly affected by climate change, etc. We hear their voice and we act accordingly”.
And no accountability and responsibility is needed. With shareholders, things are clear cut: there are dividends to distribute or not. If the latter, the CEO and management have been doing poor job and should be replaced.
Not so with ESG and a whole host of nebulous things stemming from declarations of “good intentions”.

JOHN KANEFSKY
JOHN KANEFSKY
6 months ago

“Stakeholder capitalism, by diluting the power of any one pressure group, ultimately empowers and liberates the executive to pursue its own interest”
Yes.
e.g. The inflated salaries University VCs and other similar people award to themselves can be compared with the docking of many complete day’s pay of badly paid lecturers who did not do marking (only a small part of their duties) as part of an industrial dispute.

Warren Trees
Warren Trees
6 months ago
Reply to  JOHN KANEFSKY

And the massive number of NGO’s and “non-profits” that now exist. It’s incredible to see the sheer number of people involved in this self-propelled circle jerk.

Jim Veenbaas
Jim Veenbaas
6 months ago

You know the whole thing is a politically motivated sham when Tesla gets a 37 score on the S&P Global index, and cigarette maker Philip Morris gets 84.

Right-Wing Hippie
Right-Wing Hippie
6 months ago
Reply to  Jim Veenbaas

Everybody wants to smoke, nobody wants to drive an electric car, I guess.

Hit
Hit
6 months ago
Reply to  Jim Veenbaas

I completely forgot about the Biden admin had a EV conference of some sort and didn’t even bother inviting Tesla.

Erik Hildinger
Erik Hildinger
6 months ago
Reply to  Hit

The Biden administration are not serious people.

Warren Trees
Warren Trees
6 months ago
Reply to  Erik Hildinger

Oh, I beg to differ. They are as serious as a heart attack. What do you think, “fundamentally transform our society” actually meant?

Jim Veenbaas
Jim Veenbaas
6 months ago
Reply to  Erik Hildinger

Elon Musk certainly thinks they are serious and we should too. They are going after him six ways to Sunday.

Kat L
Kat L
6 months ago
Reply to  Hit

They believe Elon is a traitor

Walter Marvell
Walter Marvell
6 months ago

ESG is an insidious ‘luxury’ virtue signal offshoot of DEI and the toxic equality ideology promoted by the Progressive Party States of the West. Like its twin Net Zero, it is driven by an irrational mental derangement which has captured the otherwise useless and wholly detached Blobs and State machinery. It is impossible to shake off having become deeply embedded in state laws and then morphed into culture thanks to willing disciples like the craven BBC. Its grip on the City is not quite as great as that on the Civil Service NHS and public sector, but it still is inflicting grievous long term unseen damage. Woke ex Blob devotees on state pension funds are crippling our vital energy and defence sectors with unthinking boycotts. Anti meritocratic positive discrimination led to the Nat West and Avivia leadership horrors. It is a car crash. Self preservation should see the City quietly drop ESG. But no matket forces impact on the Party State. Any incoming Labour Party will deepen its commitment to this divisive race credo and entrap us further in its madness.

Michael Lucken
Michael Lucken
6 months ago
Reply to  Walter Marvell

As they say politics is downstream of culture. Once the big beasts of industry finance entertainment media and journalism circle see diminishing returns from pursuing ESG and DEI politicians will eventually get the message and the Labour Party will lose interest. They are more followers of fashion these days rather than inspirational leaders.

Hit
Hit
6 months ago

I’m so relieved we have some Republicans with a backbone who will stand up to globalist. I cannot tell you how much sleep I have lost over the state of the nation the last few years. 2020 to 2022 I was very concerned that my country was on the verge of being captured by the WEF so they could implement their draconian U.N agenda and strip us of our rights.

Alex Lekas
Alex Lekas
6 months ago
Reply to  Hit

Don’t stop being concerned just yet. It’s not like the global agenda is dead, and there are quite a few Repubs who are on board with it.

Warren Trees
Warren Trees
6 months ago
Reply to  Hit

There is cause for celebration when someone like Fink stops using the term, ESG, after it has been exposed.

Nell Clover
Nell Clover
6 months ago

It’s odd that the author thinks ESG was embraced as some sort of antidote to modern American capitalism: “ESG won broad, even fervent, appeal… By the mid-2000s, American capitalism had begun to resemble its own caricature… And then came the mother of all scandals: the 2008 Financial Crisis”.

ESG *is* modern American capitalism, although it isn’t capitalism and it isn’t particularly modern or American. State power subverted to the needs to wealthy individuals and the wheels greased by buying the support of potential blockers, it is classic corporatism and ESG is the figleaf that has deluded the traditional left into embracing self enriching globalists. A major part of the 2008 financial crisis was subprime lending in the name of ESG. Lending criteria everywhere were relaxed because of “inclusivity”, and bumper financial sector profits flowed from ever increasing leveraging of individuals and “real economy” (tangible) companies. And the best bit it is, the financial sector had everyone else underwrite their risk in the name of… ESG.

ESG isn’t a risk for these financial vampire squids. The public wising up to how they’re using ESG to load the dice in their favour is the risk. And what better way to diminish that risk by simultaneously shifting the language and whipping up a panic amongst leftists that dystopia is around the corner if ESG is ditched. The useful idiots will ensure ESG keeps on paying dividends to its owners for a long time to come.

William Edward Henry Appleby
William Edward Henry Appleby
6 months ago

Peak ESG was reached about 18 months ago. How about an index rating that measures a company’s payment of taxes in the jurisdictions it does business? I bet they wouldn’t like that. Much easier to hide behind some meaningless diversity or environmental statistic, or stick some people of colour and rainbow flags on the website.

Last edited 6 months ago by William Edward Henry Appleby
Alex Lekas
Alex Lekas
6 months ago

But this year, Fink told the Aspen Ideas Festival that he’s no longer using the term since it’s been “weaponised” by critics.
Those critics caught onto the scam and remembered that the point of business is to provide goods and services that consumers want at prices they’re willing to pay, not to have companies engage in moral hectoring. And so, the pendulum has done what it always does – swing in the other direction.

Susan Grabston
Susan Grabston
6 months ago

However, ESG and DEI is still baked into CEO incentive packages. Fink has effectiely already installed the programme into capitalism. Until this is stopped, it will continue. In the old management saw: what gets measured (and wildly remunerated) gets done.

Amelia Melkinthorpe
Amelia Melkinthorpe
6 months ago

It’s DIE, not DEI.
It is one of the least godly inventions ever, and it must die.

M Shewbridge
M Shewbridge
6 months ago

ESG was always a farce and a facade. Businesses are animals that try to survive and grow. What incentives are there to save the polar bear unless it brings an ROI?

The scandal is that so many people and institutions were, or appeared to be, taken in. This article misses the most obvious real incentive behind ESG: it sells high margin managed funds, as opposed to cheap passive ones.

It’s clear the author has done his research so I wonder why he chose not to address this point.

Alex Lekas
Alex Lekas
6 months ago
Reply to  M Shewbridge

They were taken in because there was a social cost to be paid for not doing so. States like California passed laws regarding the makeup of corporate boards and patted themselves on the back as if corporate board seats carry weight beyond the 0.01% of society. Companies were essentially shamed into participating, fearful of the Twitter mob that would descend on them and how that mob’s reaction would become an actual news story.

Phil Mac
Phil Mac
6 months ago

I always smile when I see a business stating its objectives in terms of doing things that nobody tries to oppose.
Strong, capable management devotes its efforts to causing customers to give it more money and deprive its competitors of the same. Those are tough challenges; smart people are trying to do the same back on them, it means competitive venture, hard work, risk, being smart, it doesn’t care about being loved, it just wants to win the race.
Weak management declares how it’s going to look at its own navel and sees merit in the approval of others. It likes a fight it can’t lose because nobody’s trying to stop it. That’s the kind of battle it feels able to take on.
The first type really like seeing the second in its sights.

Last edited 6 months ago by Phil Mac
james elliott
james elliott
6 months ago

ESG has long since been revealed as a scam to enrich further and permanently cement the self-styled ‘elites’ in power – whilst impoverishing and immiserating the 99%.

Whether it is over or not, I don’t know.

It might take a bloody cull of the WEF, the WHO and the whole globalist nest of rats to achieve that.

Christopher Chantrill
Christopher Chantrill
6 months ago

“By the mid-2000s, American capitalism had begun to resemble its own caricature.”
Yeah, that’s the Narrative.
Enron’s management started to cheat when the market went south.
LTCM was “highly leveraged.” which means that it got wiped out when its bets failed.
Bernie Madoff was just a straight-up fraudster.
The 2008 crash was a consequence of government-encouraged and subsidized low-down 30-year fixed-rate mortgages. What could go wrong?
What we need is a Thomas Jefferson to write a letter calling for a “wall of separation” between business and government.

Anthony Roe
Anthony Roe
6 months ago

Architect is not a verb.

Ian Barton
Ian Barton
6 months ago
Reply to  Anthony Roe

If grammar is your thing, then maybe you should have used quotation marks. Just saying 


Christopher Thompson
Christopher Thompson
6 months ago
Reply to  Anthony Roe

It seems that these days there’s no noun that can’t be verbed.

Andrew Wise
Andrew Wise
6 months ago

Or verbalised (verbalized)

Vesselina Zaitzeva
Vesselina Zaitzeva
6 months ago

And thus become a verbĂ©e, I would add 😉

Clare Knight
Clare Knight
6 months ago

Let’s have a party. Lets party?

Douglas Livingston
Douglas Livingston
6 months ago

Simply, I do hope you are right

Catherine Conroy
Catherine Conroy
6 months ago

Personally, I think concern about the environment makes sense.
However, the societal and governance part of the deal is where all the above comes from.

Victoria Cooper
Victoria Cooper
6 months ago

The aims were worthy, the motivation dubious, the execution appalling. Pretending to uphold egalitarianism but maintaining a rigid hierarchy – top down politics in full flow, to the point of endangering democracy.

Daniel Patrick
Daniel Patrick
6 months ago

When you see things going on in the name of ESG that are completely, utterly and totally ridiculous, such as hiring employees based on the colour of their skin, rather than their merits; good companies in the US selling their oil refineries, to rack up ESG brownie points, only to see them snapped up by the Chinese, with much lower environmental governance standards, to create absolutely zero benefit to the environment at all whatsoever; when you look deeply at wind turbines & understand how much steel, concrete, rare earth metals are required to keep them running, how many native birds, endangered bat species, whales, dolphins they kill, how energy inefficient and expensive they really are, and a million other things that stink to high heaven, then it basically just confirms what we suspected in the first place: Just another scam to control the flow of capital.

fel rembrandt
fel rembrandt
6 months ago

One of the things about ESG that is most repugnant to a majority of people (once they find out about it) is the “S” part, which is DEI, which in turn is the trans agenda. There is nothing as destructive to women, children and humanity as a whole than the agenda to desex people, eliminate women as a separate class of people with our own need for protections from the class of people called men, and castrate children. The Davos agenda was never about saving the planet, it was about releasing the sex fetishism of elite men and turning everyone else into commodities for their use and pleasure.

Dougie Undersub
Dougie Undersub
6 months ago

I suppose we shouldn’t be too hard on Kofi Annan. The UN has to believe, or at least pretend, that there is universal agreement on what global “shared values and principles” are.
There isn’t, of course. China, India, Russia, Iran, Saudi Arabia etc never shared these values and many other countries just signed up with their fingers crossed to see what they could get out of this Western guilt trip.
ESG is doomed: the only question is will Western governments realise this in time to engineer a soft landing?

Edward De Beukelaer
Edward De Beukelaer
6 months ago

Just for the exercise sake: let’s look at it from a health pov, I am sure most of us like to be healthy.
What is the model that will most likely provide for as many people as possible (this reduces taxing needed to ay for far too expensive sickness care (i.e national health services and inefficient social care systems)) to have an as healthy life as possible? (without going health-aware-nuts). This is an economy where all can get an opportunity and enjoy the same protection of the justice system. ESG or not, makes no difference, Companies have become so large that they frighten governments (hence fair justice is not really possible anymore).
And health starts at the bottom: healthy soil, healthy air, healthy farms (= healthy food) good education, humane social structures and humane workplaces. I am not sure how these big companies can comply with this without sacrificing some of their core businesses … so what do we do…?
This article touches on a fad, there will be others. Serious trends that will provide health and wellbeing is something entirely different. Some are thinking about a type of economy where wellbeing is valued. It is a start but a difficult and big step to take….. while many keep checking the stock market in the hope to have a bit more money tomorrow …. without doing anything….hoping things won’t change…

Phil Mac
Phil Mac
6 months ago

It’s simple; you make rules that mean they must not do harm (to the soil, the air, to cite your examples) and then you stand back & let them do their free market thing.
To appeal to the altruism of business’s is stupid. The best will give it no more than lip service, the weaker will buy into it
 and then go broke as they find that focussing on giving customers goods & services they wanted at great prices was really the best way to go but they weren’t up to it.

Martin Johnson
Martin Johnson
6 months ago

ESG and everything associated with it has been a disaster for one simple, obvious, predictable, and inevitable reason: it depended on powerful people and organizations to work against their own interests. So, of course, they pretended to do so while subverting it to serve their own goals. As I said, inevitable. Only very naive people could have expected otherwise. And our media, academy, and political ranks are full of very naive people.

james elliott
james elliott
5 months ago

The thing about ‘stakeholder Capitalism’ is that…… it *isn’t* really stakeholder Capitalism.

What it is actually is a mechsnism by which massive corporate interests can make decisions – pretty much unilaterally – which are terrible for the vast majority of us. But shut down all arguments by claiming it is being done to save the planet.

One example of this is the Dutch government going ahead with plans to put all independent farmers out of business and seize their land through compulsory purchase.

This is not only horrendous disregard for the rights of private property owners, but it risks (at best) food conglomerates coming in and introducing massive factory farms to make trillions for a tiny number of shardholders whilst feeding us food which is likely to be ruinous for our health, or (at worst) mass starvation. Which is the almost inevitable result of central planning on mass scale.

And why is this ‘necessary’?

Because of rising levels of …… CO2. A harmless gas which is also, incidentally, plant food.

If we don’t totally refuse to go along with this bullshit our children may well end up slaves to these aithoritarian morons.