During a recent conference, a Fortune 500 general counsel confided in me about the true intentions behind ESG, the environmental, social, and governance standards enforced by a network of big funds and nongovernmental organizations. This narrative is shared by many senior corporate executives who have been shocked to receive poor ratings on the ESG dimensions of their companies, despite their efforts to reduce carbon emissions and improve workforce diversity.
The ESG movement began with commendable goals of reducing carbon emissions, supporting equality, and promoting strong corporate governance. However, there is an iron fist beneath the green-velvet glove. Companies are persuaded to adopt ESG terminology and the plain meaning of the principles they agreed to when joining is reframed. The political stances demanded by the ESG movement are expanding into a progressive, partisan wish list that twists social responsibility to mean controlling the First Amendment–protected speech and political leanings of private companies.
The ESG cartel, which includes Climate Action 100+, large pension funds of big blue states, and shareholder activist organizations like As You Sow and Mercy Investments, is an organized cartel with an extraordinary degree of interlocking directorships. Alabama attorney general Steve Marshall wrote in the Wall Street Journal that “these groups intend to corner the market through potentially illegal horizontal agreements and force preferred social and political objectives on American companies and consumers.”
The problem for ESG is that purported social goals don’t allow agencies to “turn a blind eye” to antitrust violations. State attorneys general are beginning to investigate possible violations of the Sherman Act that a coordinated conspiracy against a legal industry would constitute.
In conclusion, corporate leaders need to understand the true intentions behind ESG and the political stances demanded by the movement. The ESG cartel is an organized group that seeks to control the First Amendment–protected speech and political leanings of private companies. State attorneys general are beginning to investigate possible antitrust violations, which may explain the sound of shredders at work.
