The Trolley Problem, ESG interpretation by ctm

ESG is the Psychotic Bully of the Investment World

By Linnea Lueken and H. Sterling Burnett

Without quick action, environmental, social, and governance (ESG) scoring frameworks will become hopelessly embedded in our daily lives, and the people who push ESG don’t give a hoot about our well-being.

To those still unfamiliar with the ESG movement, it is, at its core, a mechanism by “which a cabal of ideologically aligned influential interests working through unelected supranational organizations are attempting to ‘reset’ the global financial system to their advantage.” Circumventing national sovereignty, free markets, and individual rights, global government organizations, the embedded bureaucrats staffing them, and the governments that fund and compose their membership are working with international corporations and financial elites to alter traditional financial methods of assessing risk and allocating capital and credit. Under an ESG system, companies, and likely soon individuals, will be assigned arbitrarily determined ESG social credit scores, which financial institutions, investment portfolio managers, and Big Tech could use to guide investment choices, decisions about who can participate in banking or get business licenses, and who can engage on social media platforms. Basically, ESG is a backdoor to a social credit score, encouraged by government, and typically imposed through regulations.

ESG is particularly interested in social justice and fossil fuel divestment, and a score can be given to your business whether you want one or not.

Companies (and eventually individuals) that do not achieve a high ESG score can be punished; banks may refuse to provide loans to, or limit capital investments available to the company. There may also be limited access to tax credits, insurance, grants, and other kinds of contracts. People with low ESG scores could also be banned from social media outlets.

Although the ESG investment framework is pitched as a caring, environmentally conscious alternative to traditional revenue-focused investment, it is actually a weapon of the deranged, prioritizing the pursuit of “woke” political ends over advancing human welfare.

Take, for example, the reaction of one analyst of a “risk intelligence” company called Maplecroft, to a recent violent coup attempt in the small island nation of São Tomé and Príncipe. In an interview with Rigzone, the analyst said “[t]he coup attempt is incredibly damaging for the country’s political and ESG credentials, and will likely deter investors in the nascent oil and gas industry[.]”

Four people are reported dead, the coup was thwarted, but an investment fad is at the top of some experts’ minds.

To regular people, this is insane—but to world leaders in government and CEOs of multinational corporations, ESG is the future. At the recent United Nations Climate Change Conference (COP27), the message was clear: fossil fuel use in particular has to go, and financial institutions should enforce it.

Fossil fuels and their derivatives have lifted much of the world out of extreme poverty, have vastly improved crop yields, help get clean water and transportation to the most remote regions, aid in developing medicines, provide inexpensive and clean heating, air conditioning, and thousands of other things that we take for granted. More than 4,000 items and products in everyday use in developed, and many developing countries alike, either contain fossil fuels as a necessary component, or are wholly derived from fossil fuels. Even for essential products not derived from fossil fuel, they are often developed, manufactured, and delivered through technologies that rely on fossil fuels. A strictly enforced ESG effort would halt this opportunity and development for poor nations, regardless of their political stability.

However, the damage borne by ESG won’t stop in poor nations. By limiting investments for oil and gas operations domestically, it will also continue to keep energy prices high, undermine economic growth, and leave the United States dangerously dependent on foreign sources of energy and technology.

And it’s getting worse. New regulations from the Biden administration allow ESG considerations to be a factor in your 401(k) management, and your employer can invest your money into an ESG fund as the default option.

The vast majority of people who invest in the markets, whether as individuals or as part of a private or public pension, do so in the hopes of maximizing returns to provide for a secure retirement, one that provides them the ability to not simply survive but thrive and enjoy some modicum of freedom to pursue their post-retirement dreams. By allowing ESG to be a consideration in banks, investment managers, and stock portfolios goals, the government is sanctioning these financial elites to use other peoples’ money to pursue their self-selected social and environmental goals. Under ESG, the government is undermining the fiduciary standard of using clients’ money to pursue profit as the sole legal guideline in order to maximize return to their client investors; and replacing it with whatever social or environmental goals the banks and fund managers think people should be pursuing.

BlackRock, the world’s largest asset management company, with more than $10 trillion under its control, is just one of many companies pushing ESG. Some colleges are creating curriculum for aspiring sustainability busybodies. To give you an example of the kind of people these careers attract, one sustainability investment website put together a list of ESG jobs, including one that contains the telling opening line, “[h]ave you ever wanted to be a bodyguard but lacked physical strength? If so, an ESG career path may be your second chance.”

Fortunately, it is not all doom and gloom. Some states have passed laws barring financial firms that have an ESG-focus from doing business with state and local contracts. Best of all, it seems to be working. After several states pulled money out of BlackRock, the company’s stock price was downgraded, and it continues to face pressure from oil producing states that are not particularly thrilled by fossil fuel divestment schemes.

ESG is the psychotic bully of the investment world, its advocates use emotional blackmail and fear about climate change to get away with becoming corporate kingmakers, while forcing companies that aren’t in lockstep with a “stakeholder capitalism” agenda out of business. They do not care that it hurts families and the world’s poor. As such, we must not let them win.

Originally published at Townhall.com

Linnea Lueken  (llueken@heartland.orgis a research fellow with the Arthur B. Robinson Center on Climate and Environmental Policy at The Heartland Institute.

H. Sterling Burnett, Ph.D., (hsburnett@heartland.org) is the director of the Arthur B. Robinson Center.

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farmerphil
December 8, 2022 6:11 pm

I totally agree . This is corporate blackmail.

insufficientlysensitive
December 8, 2022 6:22 pm

New regulations from the Biden administration allow ESG considerations to be a factor in your 401(k) management, and your employer can invest your money into an ESG fund as the default option.

Some rob you with a .45 Colt, and some with a fountain pen.

Tom Halla
December 8, 2022 6:22 pm

ESG is vigilante fascism.

Izaak Walton
December 8, 2022 6:48 pm

This is nonsense. ESG is nothing more than letting people invest their money according to whatever criteria they like. It is an expression of a free market and of individual rights. Alternatively if people are allowed to refuse to serve customers because of their lifestyle then people should be allowed to refuse to invest in companies that don’t match their values.

AGW is Not Science
Reply to  Izaak Walton
December 8, 2022 7:29 pm

That doesn’t require government interference. If you’re stupid enough to “invest” in “green energy” snake oil schemes, have at it. I don’t want a nickel of my money sunk into that worse-than-useless crap due to some government or “hedge fund” edict.

renbutler
Reply to  Izaak Walton
December 8, 2022 7:32 pm

There are voluntary ESG funds for sure, but the problem arises when state pension funds invest in these poorly performing funds in the name of woke. Choices for pension holders are limited or non-existent in those cases. That has nothing to do with the free market or individual rights.

Steve Case
Reply to  renbutler
December 8, 2022 7:59 pm

“…the problem arises when state pension funds invest in these poorly performing funds…”
_________________________________

And that’s the point, the state wouldn’t be acting in the best
interest of the pensioners. In other words, as Lueken and
Burnett point out above:

“Under ESG, the government is undermining the fiduciary standard … and replacing it with whatever social or environmental goals the banks and fund managers think people should be pursuing.”

David Blenkinsop
Reply to  Izaak Walton
December 8, 2022 7:54 pm

Being denied a loan on the basis of an abstract score that you either don’t agree with, or that can even represent an outright attack on your interests — that’s not freedom of business choice.

It’s more like a scheme for manipulation or control.

Hivemind
Reply to  David Blenkinsop
December 10, 2022 3:26 am

And yet, many Australian banks will refuse to lend to fossil fuel companies.

B Zipperer
Reply to  Izaak Walton
December 8, 2022 8:36 pm

Izaak:
[ESG] “is an expression of a free market and of individual rights.”
No, ESG, if mandated by SEC regulations, is the opposite of a free market.
It is forcing companies to follow a particular political ideology, using arbitrary metrics that have little to do with how businesses operate, nor do they seem to enhance returns on investment compared to the status quo.
.
If you like the idea of ESG, have a private entity conjur up a “score” for each company or mutual fund, then let individual investors decide whether to invest. Leave the government regulators out of it. Vanguard, Fidelity etc have a fiduciary obligation to their investors, not to the proponents of ESG.

Similarly, the SCOPE 1, 2 & 3 regulations being floated by the SEC [and now the Dept of Defense – see WSJ editorial 12/8/22] are using “climate change” to force companies to waste lots of money and time cataloging CO2 emissions. All to further a “NutZero” climate agenda.
that will wreck a modern economy and impoverish its citizens.

Steve Case
Reply to  B Zipperer
December 8, 2022 8:53 pm

“Vanguard, Fidelity etc have a fiduciary obligation to their investors, not to the proponents of ESG.”
___________________________________________________

Horse cart vs. cart horse.

sprezzaturarrd
Reply to  Steve Case
December 10, 2022 2:48 pm

On Dec. 7th, Bloomberg reported that “Vanguard Quits Net-Zero Group, Marking Biggest Defection Yet” https://www.bloomberg.com/news/articles/2022-12-07/vanguard-quits-net-zero-alliance-marking-biggest-defection-yet

186no
Reply to  Izaak Walton
December 9, 2022 1:15 am

What claptrap; ESG is “if you do not follow what we say you should do we will ensure you suffer financially”
I can point you to any ESG portfolio that uses ETFs to replicate a particular index. Due to the way financial markets operate, especially investment markets, indices are populated largely by the scale by which shares are bought (and sold) and the particular index “reboots” on a regular basis with “promotion and relegation” very evident.
An example is a massive US portfolio manager offering ETF driven index funds you will not have heard of; if you were to look at the components of said portfolio you will find (atm) 4 pharmaceutical businesses all of whom have perpetrated the most massive harms to human beings since 2020 by manufacturing experimental GET drugs which have acknowledged capacity to cause serious adverse harm and death on a scale unprecedented in human history. Additionally, at least one of those 4 Pharma businesses has a history of multi billion dollar punitive fines and damages awarded against it.

The fund I refer to is marketed as an “ESG” compliant fund; I will leave you to explain how, given the admitted and acknowledged harms of these drugs, and their proven prior corporate malfeasance, these funds pass the Environment, Social and Governance hurdles. Beats me; perhaps you are comfortable with this level of ethical and moral ambivalence.

BigCarbonPrint
Reply to  Izaak Walton
December 9, 2022 7:07 am

It is an expression of a free market and of individual rights

Weapons grade twaddle. ESG is the polar opposite of the free market. Having your access to a loan being constrained by whether or not you invested in a (completely legal) fossil fuel company is the curtailment of someone’s rights. This is a vastly different situation to baking a gay wedding cake.

Moriarty
Reply to  Izaak Walton
December 9, 2022 9:01 am

No, it’s not letting people invest as they like. It’s not the free market. It’s being forced on people by a few activist fund managers who are posturing for political reasons.

Russell Cook
Reply to  Izaak Walton
December 9, 2022 10:38 am

ESG is nothing more than aiming the gun of a bad business rating at the heads of executives in order to extort them into adopting the anti-science political agendas of the Clima-Change™ mobsters.”

Fixed your sentence for ya. Think of the whole scheme as a form of virtual protection racket against the woke BLM / “anti-fa” mob, and you’ll figure out why it is an insidiously tyrannical idea.

MarkW
Reply to  Izaak Walton
December 9, 2022 10:50 am

If it were optional, you would have a point.
The issue is that for most of us, it isn’t optional. Something that you well know.

Hivemind
Reply to  Izaak Walton
December 10, 2022 3:25 am

The problem is that people aren’t given a choice. For instance, my bank, a mutual fund, decided to change to use ESG investing without asking me. Without changing banks, I have not choice but to suddenly do ESG investments. I could change banks, but can you tell me of any bank that doesn’t do it?

mleskovarsocalrrcom
December 8, 2022 8:38 pm

ESG is nothing more than a not so secret cabal making up its’ own rules for membership and intimidating those who don’t subscribe.

Rod Evans
December 8, 2022 11:47 pm

ESG stands for Economic Suicide Guarantee. It is as simple as that.

MCourtney
December 9, 2022 12:02 am

Enforcement of ESG principles is just the White Man’s Burden that Kipling talked about.

ewinb
December 9, 2022 4:29 am

My favorite piece of evidence that ESG is a fascist psychosis is when a mining project that has documented the scope of the resource and published the rate at which it intends to extract it, then goes on to state it is committed to “sustainability”. We are being scammed while by authoritarian people with grotesque ideological blindness.

Tom Abbott
December 9, 2022 4:52 am

From the article: “At the recent United Nations Climate Change Conference (COP27), the message was clear: fossil fuel use in particular has to go, and financial institutions should enforce it.”

Eventually, they will figure out that is not possible. Of course, the alarmists can do a lot of damage to the rest of us because of their unreasonable, unfounded fears of CO2, between now and then. They’ve already done a lot of damage.

Energywise
December 9, 2022 4:54 am

ESG, otherwise known as Easily Sold to Gullibles has had its ruinous day – people are slowly awakening from their net zero slumber, be it with regards to EVs or heat pumps, wind / solar power or biomass enraged by the weekly sight of the elites feverishly private jetting back and forth between their beach front properties and environmental award ceremonies, where they gorge on meat dishes

We are no longer buying your do as I say snake oil – the planet and its resources belong to us all

Scarecrow Repair
December 9, 2022 10:14 am

I first heard of ESG-like nonsense with some (all?) EU “stakeholder” representation on corporate boards — employees, customers, suppliers, and whoever else could convince governments they had a stake in the future of the company. It seemed so bonkers — it’s hard enough keeping shareholders’ interests in mind, then to add all these other people. All these stakeholders’ interests are at odds and cannot be reconciled.

And now they want to add the environment, social justice, indigenous people, righting wrongs 500 years after the fact … it is obvious to anyone with half a brain that there is only one entity which has the wisdom and perfect knowledge to reconcile the impossible: government! And preferably, one single world government to avoid squabbling among separate governments.

grlangworth
December 9, 2022 9:37 pm

Employee Benefit Funds are subject to a “Prudent Man Rule” which requires that these beneficiary-bound funds be invested to reduce unfunded liabilities without undue risk. Banks or investment advisors that do not optimize these funds’ return on investment should be fired or indicted. Period.

rovingbroker
December 10, 2022 4:03 am

An investment is an asset or item that is purchased with the hope that it will generate income or appreciate in value at some point in the future. An investment always concerns the outlay of some asset today (time, money, effort, etc.) in hopes of a greater payoff in the future than what was originally put in.

https://www.investopedia.com/terms/i/investment.asp

If you or your employer puts ESG “investments” into your 401k, when retirement time comes around it is likely that you will be living on Social Security — but — good for you. You helped save the planet.

Or not.

sprezzaturarrd
December 10, 2022 2:56 pm

Marmon corp., a subsidery of Berkshire-Hathaway, has jumped on that ESG bandwagon, completely with social-diversity plans to have internal organizations tailored to specific groups to “empower them fully”. One such group that kicked this pledge off was for women and “their allies who support women’s lack of voice in the business place”. It’s disturbing because this all violates Warren Buffet’s code of ethics on fairness and anti-discrimination that employees in all of his companies have to sign every year. But this is coming down from Marmon’s top brass so you would assume it has Mr. Buffet’s blessing.

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