The three letters ESG stand for Environmental, Social and Governance, or in plain English: for environmentally and socially conscious investing. The term was first used in 2004 in a report co-authored by the UN with 20 financial firms, including Goldman Sachs and UBS. So it’s not a red-green slogan, he has purebred capitalist parents.
This term really took off some 15 years later. BlackRock CEO Larry Fink trademarked it. In his newsletter to the CEOs of the most important companies, he wrote: “Companies today must ask themselves: what is our role in society? How do we deal with our impact on the environment? Are we doing our best to build a diverse workforce? Are we adapting to technological change?»
Fink didn’t stop at words of warning. He also announced that ESG will be an important pillar of BlackRock’s investment strategy going forward.
When the world’s largest asset manager speaks, the financial community listens. Today, ESG is ubiquitous. Although no one really knows what’s behind it, there is hardly a bank or asset manager today that doesn’t swear by this label. Binding ESG criteria do not yet exist and are likely to be difficult to define.
It is repeatedly argued against ESG by the left and green that it is ultimately no more than greenwashing, a fig leaf that should still obscure investments that are traditionally purely focused on profit maximization. The accusation is not unjustified. The well-known business magazine “Economist” has already devoted several cover stories to this accusation. The “Tagesanzeiger” is currently reporting on a major scam involving certified organic wood.
The financial community has become accustomed to accusations of greenwashing from the left. The attacks from the right worry her much more. ESG has since been discovered by US Republicans and other right-wing populists. They do not see this as greenwashing, but as the highest form of alleged “wake up capitalism”.
The protest against ESG has started in Texas
The right attacks are effective. The Financial Times reports: “Wall Street’s largest asset managers, private equity firms and brokers are warning that opposition to sustainable investing has become a material risk. This is evident in the bitterness with which reports on ESG principles are presented as a threat to earnings.”
What once started as a protest from the oil industry – in Texas, where else? – has now escalated into an anti-ESG tsunami. Conservative states prohibit their state pension funds from doing business with asset managers that carry the ESG label. The Republican-dominated House of Representatives has just passed legislation reversing a Labor Department rule that allows pension funds to include ESG criteria.
The bill is a paper tiger, it has no chance of getting through the Senate, and even if it did, President Joe Biden would veto it. But the law shows that the Republicans believe they have found a trump card for the 2024 election.
Like Wokeness and LGBQ, ESG has become a factor in the political-cultural strife in the US. Ron DeSantis leads the way. The Florida governor and a possible presidential candidate have established themselves as champions of culture. For example, he stripped Disney of traditional tax privileges because the company dared to criticize the law against mentioning homosexuality in schools.
Now he goes one step further. Commenting in the Wall Street Journal, he recently announced: “In the upcoming session, the House will pass an anti-ESG bill that will protect people in Florida from being discriminated against by major governments based on their political and religious beliefs where financial institutions to suffer from. “
Republicans have always warned against government interference in the free market. For a long time, DeSantis was even considered a neoliberal hardliner. But according to the motto, “What do I care about my chatter from yesterday?” he has turned around.
He describes ESG as another form of “cultural Marxism” and justifies his intervention in the market as follows: “When companies try to use their economic power to advance an awakened agenda, they become political actors. In such an environment de facto leave the political battlefield to the militant left.”
The Heritage Foundation, the largest conservative think tank in the US, says the same thing. She has sent out several newsletters condemning ESG. Andrew Olivastro, a member of the board of directors, told the New York Times: “I see ESG as a great umbrella under which hides a web of corporate state and the management class. It has nothing to do with promoting human progress.”
Mike Pence doesn’t like to be left behind either. Trump’s former vice president has ambitions to become president himself and is therefore jumping on the Woke train. “It is disappointing that President Biden is prioritizing ESG and Woke policies over the interests of hard-working Americans in pension fund investment guidelines,” he tweeted. “We will keep fighting until we finally bury ESG.” Does it help?
Soource :Watson
I am Amelia James, a passionate journalist with a deep-rooted interest in current affairs. I have more than five years of experience in the media industry, working both as an author and editor for 24 Instant News. My main focus lies in international news, particularly regional conflicts and political issues around the world.
