ESG’s Perverse, Narrow, Fraudulent Ethical Principles

Failure of basic fiduciary duties to investors is just the tip of ESG fraud iceberg

Paul Driessen

Warning: Your retirement fund may have been Shanghaied by BlackRock or other Wall Street asset managers who’ve unilaterally decided that the tens of trillions of dollars of other people’s money they control should be used to advance political causes they favor – to “make the world a better place.”  

As most people know, ESG stands for Environmental protection, Social justice, and Governance of corporate and societal affairs. They’re all noble-sounding causes. However, under ESG they’re centered around progressive, woke agendas, with prevention of “manmade climate cataclysms” uppermost. Fund assets are used to drive “net zero” climate agendas and punish or de-fund fossil fuel companies.

That narrow focus creates serious problems. Those trillions of dollars are supposed to be passively invested in index and other funds, under fiduciary obligations to secure maximum returns in support of state, local, corporate and personal retirement and investment accounts. Under ESG, however, strong returns are too often sacrificed to serve politicized agendas, often in collusion with governments, activists and other financial institutions, and thus also in violation of antitrust laws and basic ethical principles.

That’s why Asset manager Vanguard recently left the UN-sponsored “Glasgow Financial Alliance for Net Zero.” Meanwhile, Arizona, Florida, Kentucky, Louisiana, Missouri, North Carolina, Texas, West Virginia and other states are pulling tens of billions of dollars out of BlackRock, State Street and other Wall Street asset management firms, for violating fiduciary duties. It’s just the tip of the fraud iceberg.

Woke ESG practitioners also employ narrow ES&G definitions to virtue-signal, pontificate and impose prescriptive agendas with little or no regard for the consequences. When the “existential threat of manmade climate change” is the primary arbiter, enormous problems associated with replacing fossil fuels with “clean renewable energy” are simply ignored, suppressed and censored out of the analysis.

People and planet realities absolutely have to be included in any ethical ESG analysis.

Environmental protection. Rather than looking only at the temperatures, storms, droughts, rising seas and other environmental costs that climate models falsely blame on fossil fuel emissions – any accurate and honest ESG scorecard must also assess the enormous ecological impacts from wind-solar-battery (WSB) energy systems that will supposedly replace oil, gas and coal.

WSB systems and associated transmission lines do not appear spontaneously, via Materials Acquisition for Global Industrial Change (MAGIC). They require mining on unprecedented scales. President Biden’s initial batch of offshore wind turbines alone would require 110,000 tons of copper, refined from 25,000,000 tons of ore, after removing 40,000,000 tons of overburden – plus millions of tons of iron, manganese, aluminum, nickel, concrete, plastics and other materials … from billions of tons of ores.

Replacing all U.S. coal and gas electricity generation with WSB – plus gasoline vehicles and gas stoves and furnaces – would require tens of thousands of wind turbines, billions of solar panels, billions of battery modules for vehicles and backup electricity storage, and thousands of miles of new transmission lines. Has BlackRock calculated the ore body and mining requirements for that? For a global transition?

All those turbines, panels, modules, transmission lines, mines, processing plants and factories have to be located somewhere. Have the ESG potentates determined in whose backyards they will go? (Probably not Larry Fink’s or John Kerry’s.) Have they assessed the impacts on scenery, habitats and wildlife? the air and water pollution from the mines and other operations? the likelihood that endangered right whales would be driven to extinction by wind turbine installations off the U.S. Atlantic Coast?

Do all these WSB mines, foundries, factories and impacts even get (obviously negative) ESG scores?

Social justice. ESG theology holds that the poor and people of color suffer most from climate change. In reality, they benefit most from having abundant, reliable, affordable fuels and electricity – for cars, jobs, modern homes, cooking, heat and air conditioning. In fact, the poor and people of color are not faring all that well in Britain and Europe, where the “transition to green energy” is well underway.

Over seven million British households have fallen into “fuel poverty” this winter, and special “warm rooms” have been set up to help people survive freezing weather. Recent headlines warn that Britain could have nationwide blackouts and extensive factory shutdowns and layoffs this winter. In Germany, families are stocking up on candles, so that they can at least read while they shiver jobless in their homes.

People are dying – who would have survived illnesses and preexisting health conditions if they hadn’t been so impoverished, cold and malnourished. In the USA, 14% of seniors have skipped meals and 10% delayed or canceled medical procedures or rationed prescription medications in 2022 because of sharply rising energy, food and other prices. Honest ESG scores would factor all this in, as well. 

Developing countries desperately need dependable, affordable electricity to create jobs, lift families out of poverty, modernize homes, schools and hospitals, provide clean water, and replace wood and animal dung for cooking and heating. Even today, millions of parents and children die from respiratory and intestinal diseases that are unheard of in wealthy countries, because they don’t have electricity.

ESG scoring ignores all of this, actively stymies investment in fossil fuel power plants in African and other countries, and attempts to limit financing to wind and solar energy and whatever jobs and living standards this limited, weather-dependent energy can support. That’s hardly ethical or socially responsible.

Governance of corporate and societal affairs. ESG activists and financial institutions coopt and collude with corporate, federal, state and local governments to serve the climate crisis agenda, and drive investment out of fossil fuel endeavors and into “renewable” energy. In essence, this is fascism, an economic system in which government doesn’t own the means of production, but controls them through laws, policies and arrangements with financial institutions, corporations, activists, media and academia.

Equally troublesome, ESG inevitably results in modern industrialized nations de-developing, as their factories and jobs migrate to China, India and other countries that are not obligated under climate agreements to reduce their coal and natural gas use anytime soon, have no intention of doing so, and are burning record amounts of coal to ensure reliable and affordable electricity.

This also raises disturbing national security concerns, as the United States and its allies become ever more dependent on Chinese factories and Chinese controlled supply chains for wind, solar, battery, transformer, communication, computing, healthcare and even defense/weaponry raw materials and technologies.

ESG advocates minimize these concerns, even as they ignore how soaring raw material demands under Net Zero agendas would trigger skyrocketing prices for increasingly scarce commodities, and thus imperil the energy infrastructures and economies of nations across the globe.

The words scam and fraud come to mind. But an even better term has its origins in China – Shanghaied: using trickery, intimidation or violence to force someone to serve your navy … or company. In this case, ESG pressures are forcing investors, companies and countries to serve the interest of China’s government and corporate sectors, which control supply chains and manufacturing for technologies of every description, especially in the energy sector. ESG scorecards pay no attention to this, either.

In fact, BlackRock, State Street, other ESG stalwarts, and their government and environmentalist allies seem intent on destroying our planet with “green” energy, to save it from fossil fuel calamities that exist in climate models and fevered imaginations (as in “Earth has a fever”) … but not in the Real World.

This Christmas or Hanukkah, let’s all give our friends, relatives and financial institutions the gift of wise, honest, accurate and insightful Environmental, Social and Governance principles.

Paul Driessen is senior policy advisor for the Committee For A Constructive Tomorrow (www.CFACT.org) and author of books and articles on energy, environmental and human rights issues.

4.8 38 votes
Article Rating
24 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Philip CM
December 25, 2022 10:13 pm

Expecting to find an ethical and honest foundation to this social Justice/CAGW mashup scam is quite naive.

Elliot W
December 25, 2022 11:55 pm

The intent is to beggar the middle class. Thus it serves its purpose.

cilo
Reply to  Elliot W
December 26, 2022 1:56 am

The intent is to beggar the middle class

The intent is to end world hunger, and feed the world.
The prayer of the commy capitalist: “…buh, buh, but who’s gonna payyy for iiit?” So we just kill the hungry, it saves costs.
Then, once ESG has done its magic, all the means of production will belong to one entity, and that entity will be the only one allowed to feed the world. Not for free. …and everyone else’s foodstuffs will be non-FDA approved, and as such classified as poison. Including your own fruit trees, carefully hidden from sanitation inspectors looking for “sources of contamination of commercial crops”.
Beggaring (I miss a ‘u’ there somewhere?) the middle classes is just one of many steps towards cancelling all opposition, leaving only those beholden unto or dependent upon the monopolists. Millionaires and entertainers. Crooks and prostitutes. The two phallanxes surrounding the throne, insulating against the Beastly Mob.
The desire to own a live pet disqualifies you… you may own slaves, though.
Just by the way, if you listen to their demands, and contemplate the most likely results, it turns out to be nothing other than a paraphrase of a certain infamous century-old minutes-of-meeting commonly referred to as “fraudulent and anti-Semitic”.
Just saying…

andersjoan
December 26, 2022 1:22 am

Can’t these unethical fund managers be taken to court for dereliction of their bounden, fiduciary duty towards investors?

Andy Espersen.

cilo
Reply to  andersjoan
December 26, 2022 2:01 am

several cases pending, ongoing and already thrown out…

Tom Abbott
Reply to  andersjoan
December 26, 2022 4:03 am

They should be taken to court because they are scamming the public. There is no evidcence that CO2 needs to be regulated or curtailed, but these companies are making investment decisions based on CO2 being a problem, yet they can’t prove it is a problem.

As a result of their wrong-thinking, these companies are losing money for their customers and are doing great harm to Western economies with their personal war on oil, coal and natural gas.

Blackrock is feeling the heat. For the last few months they have been advertising on tv telling us how wonderful Blackrock is and how Blackrock is good for us. Telling more lies, and wasting more money.

Frank from NoVA
Reply to  Tom Abbott
December 26, 2022 5:28 am

A potential fix – make the fund investors, not the fund managers, the owners of record for purpose of voting the shares. Of course, the fund managers would be responsible for issuing and collecting ballots.

Drake
Reply to  Frank from NoVA
December 26, 2022 11:25 am

Ditto!

Drake
Reply to  Drake
December 26, 2022 11:30 am

And by this I mean the ACTUAL share owners, not the Union retirement fund managers, or the corporate pension fund managers, but the actual “beneficiaries” of the funds on a per dollar pro rated basis.

Any “unvoted” shares to be counted as “abstentions”, not to be assigned by the fund managers.

Then people like you and I Frank, who would actually submit votes, would have a say in all the companies owned by us in mutual funds, etc.

John Hultquist
Reply to  Frank from NoVA
December 26, 2022 12:29 pm

The Vanguard Total Stock Market Index fund has 4,026 (Nov 2022) companies; 6 more than the index used. A diversified account will have several other stock funds and bond funds. Someone with a six-figure account could “own” seven or eight thousand companies. The account owner would (theoretically) have to deal with that many e-mails or paper documents at least once a year. Most would soon opt out, and as suggested by Drake (below) there would be many thousand abstentions. Too many such and the company will not be able to conduct business.

The solution is to tell the Fund Manager to not put your money in ESG sorts of places or you will find a different firm.

B Zipperer
Reply to  John Hultquist
December 26, 2022 9:46 pm

John:
Yes! Refuse to invest in ESG/”woke” companies.
But are there enough “anti-woke” firms to have a diversified porfolio?
A large proportion of the S&P500 companies have at least uttered some ESG platitudes, likely hoping the alligator eats them last.
It’s kinda like trying to not buy anything made in China: it’s difficult!

btw As mentioned elsewhere on WUWT, ESG investing has not been shown to be more financially successful; and probably worse since they don’t own any oil/gas firms [one a few bright spots].
https://www.newsbusters.org/blogs/business/jeffrey-clark/2022/09/26/bloomberg-columnist-smacks-apostles-woke-esg-movement

Frank from NoVA
Reply to  John Hultquist
December 26, 2022 10:09 pm

‘The solution is to tell the Fund Manager to not put your money in ESG sorts of places or you will find a different firm.‘

I think companies become ‘ESG sorts of places’ when activist fund managers vote in activist directors, e.g., XOM. Yes, it probably does become unwieldy considering the vast number of publicly held companies, so maybe the solution is that passively held shares vote with management unless otherwise directed by the account holders.

Last edited 1 month ago by Frank from NoVA
Ron Long
December 26, 2022 1:59 am

Thanks for the ESG report, Paul. The ESG Loonies do not appear to calculate any benefit versus cost ratio, or any cost of adaption versus mitigation ratio, or even if the whole CAGW issue is correct. What if it is correct, and the carbon-based part of the power structure has contributed to the additional CO2 in the atmosphere, what is the benefit of the (NASA declared) 10% greening of the earth? Cheaper and more available carbon energy and greening of the earth against what?

CO2isLife
December 26, 2022 3:45 am

The unfortunate reality of ESG is that these companies will eventually bankrupt themselves insulting their clients and customers., and producing things no one wants. This is just one example of the magnitude of the losses ESG is generating.

Hollywood Lost More Than $500 Billion in Market Value in 2022
https://www.breitbart.com/entertainment/2022/12/25/hollywood-lost-more-than-500-billion-in-market-value-in-2022/

Steve Keohane
December 26, 2022 5:46 am

ESG stands for Environmental protection, Social justice, and Governance of corporate and societal affairs”, the ideal excuse for fascism.

CO2isLife
Reply to  Steve Keohane
December 26, 2022 7:31 am

Here is a nice video regarding the foundation of ESG. Yes, it is one of the pillars of Fascism.
https://www.theepochtimes.com/vivek-ramaswamy-exposes-the-greatest-form-of-institutionalized-racism-in-the-united-states-today_4868346.html

Ronald Stein
December 26, 2022 6:21 am

ESG Reality Check:
Developing countries desperately need dependable, affordable electricity AND THE PRODUCTS AND FUELS MANUFACTURED FROM FOSSIL FUELS to create jobs, lift families out of poverty, modernize homes, schools and hospitals, provide clean water, and replace wood and animal dung for cooking and heating. Even today, millions of parents and children die from respiratory and intestinal diseases that are unheard of in wealthy countries, because they don’t have electricity NOR ANY OF THE 6,000 PRODUCSTS MADE FROM OIL DERIVATIVES MANUFACTURED FROM CRUDE OIL THAT DID NOT EXIST BEFORE 1900.

Yirgach
December 26, 2022 6:23 am

5TimesAugust – Jesus what happened to us?

https://youtu.be/Xu0GPo7GkPk

Last edited 1 month ago by Yirgach
antigtiff
December 26, 2022 8:03 am

ESG is just another tool…..the objective is Cuba, Venezuela, N. Korea etc. type of control over the slaves…peons…TOTAL POWER is the objective by whatever means necessary. All things and methods are permissible to achieve the END…..Lenin…Stalin….Mao….Kimmy Jong…Xi…..the list is long…..and this Joey Biden character is not excluded from the list.

nailheadtom
December 26, 2022 8:08 am

Mining? As the California Mining Journal masthead proclaimed, “Without mining there is no civilization”. Without mining we return to flaking arrowheads out of flint to dispatch our supper. Mining is a core activity. Its externalities must be mitigated but it can’t be dismissed or regulated out of existence by the very people who depend on it daily in every aspect of their lives, aware of that fact or not.

ATheoK
Reply to  nailheadtom
December 26, 2022 7:53 pm

Without mining we return to flaking arrowheads out of flint to dispatch our supper.”

Not quite:
‘Without mining we return to flaking arrowheads out of flint that we happened to chance upon, to dispatch our supper.’

Otherwise, mankind would have to mine their flint & chert to strike sparks from iron.

And that iron will have to be strictly meteoritic origin, irons, as it requires mining to collect coal to make coke to smelt iron ore into iron.

People laugh about putting people back in the stone age, when leftists clearly describe a world pre-fire in knowledge or experience. Too many leftists, anyone can make fire by rubbing sticks together. When the reality that it takes somewhat specialized knowledge.

Yes, specialist knowledge of how to spin the stick and how to capture the tiny charcoal spark in flammable tinder, then breathe that spark it into fire, finally to build that small insignificant flame into a useful fire.

mleskovarsocalrrcom
December 26, 2022 11:04 am

I sound like a broken record …… ESG, WEF, AGW, CRT, and more are all product of propaganda made possible by Marxists buying the MSM. Had it not been for the internet they would have achieved their goal of convincing people that Democracy and Capitalism are the cause of all our woes. So they’re going after the internet now in case you haven’t noticed. Wave enough money in front of someone and they’ll sell you anything.

n.n
December 26, 2022 11:42 am

Ethics is a relativistic religion. That said, social justice anywhere is injustice everywhere. Diversity (i.e. color judgment, class-based bigotry) breeds adversity, and, clear and progressive dysfunction.

Thomas Finegan
December 28, 2022 7:52 pm

My pension is tied up in the worst ESG offender of them all, CALPERS
California Public employees Retirement System

%d bloggers like this:
Verified by MonsterInsights