A 2021 Columbia University and London School of Economics study showed that 147 American companies that were part of ESG funds had worse compliance records when it came to labor and environmental rules than companies in 2,428 non-ESG portfolios.
Journalist Rupa Subramanya wrote an essay for The Free Press about The Giant Grift, That Swallowed Wall Street—and Maybe Your Savings.
ESG, or stakeholder capitalism, is the giant grift.
ESG is killing life savings and investments. The scam needs to die; the sooner, the better. Nineteen Republican states AGs are looking to sue BlackRock, one of the three asset managing firms pouring peoples’ money into ESG stocks. They are not fulfilling their fiduciary duty. Their mission is to seek the best financial returns for investors. Instead, they are wasting it on non-profitable leftist social goals.
ESG stands for Equity, Social, and Governance. Investment firms give corporations scores based on their ESG values. With that power, they control boardrooms by placing people according to the color of their skin, their gender, and transgender, and they do it by quotas. You’re not allowed to invest in Russia and gunmakers, and fossil fuel companies won’t garner the high scores needed.
The Federal Reserve is looking to make it the standard for banks.
It’s all to save the planet allegedly. But people are figuring out that giving Larry Fink at Black Rock all your money isn’t saving the planet, and diversity doesn’t help investments.
Ms. Subramanya spoke with leaders in the field:
Aswath Damodaran, a finance professor at NYU’s Stern School of Business, said in an email to her: “ESG is a scam, an idea that was born in sanctimony, nurtured in hypocrisy, and sold with sophistry. The inhabitants of this space are either useful idiots who think that they are making a difference to society when they are, in fact, just pushing problems behind curtains, or feckless knaves, who use it to make money. The only healthy endgame for ESG is another acronym: RIP. And it will not be a moment too soon.”
“Pension funds hold $40 trillion in assets across the United States,” Jed Rubenfeld, a former Yale Law School professor who now advises Vivek Ramaswamy’s Strive Asset Management, told me. “And they’re very important. They’re people’s retirement money. That’s what they’re going to live off when they get older and can’t work anymore. And pension funds are under a special legal duty to not do anything with pensioners’ and retirees’ money other than use it to try to increase financial benefits.”
ESG is probably not constitutional since they do not meet their fiduciary duty. It’s also not transparent.
Red states are pushing back, Subrmanya says. In an August 2022 letter from 19 Republican state attorneys general to BlackRock CEO Larry Fink, the attorneys general hinted they might sue BlackRock. They want to know the actual values for the investors and retirees.
Critics’ voices are growing louder.
The funds don’t even achieve their goals in general, as Subramanya writes. A 2021 Columbia University and London School of Economics study showed that 147 American companies that were part of ESG funds had worse compliance records when it came to labor and environmental rules than companies in 2,428 non-ESG portfolios.
The obsession of DEI – Diversity, Equity, and Inclusion – now governing life savings and corporations – does so at the expense of white men. They are institutionalizing anti-white racism.
They’re blowing investment money that includes Americans’ retirement savings.
“In 2022, eight of the top ten actively managed ESG funds in the United States fared worse than the S&P 500’s 14.8% decline,” Subranya writes.
Chamath Palihapitiya, a prominent venture capitalist, took to CNBC in February 2020 to call it a “complete fraud.”
Tariq Fancy, who used to oversee ESG investing at BlackRock, the powerful asset management firm, published a blog post in August 2021 arguing ESG was just a label the firm slapped on funds to charge higher fees.
Critics of social justice parading as a serious investment strategy are growing:
Former attorney general William Barr, who served under Donald Trump, told Subramanya that ESG is “a form of extortion” that is forcing “companies to take particular actions whether or not those actions are in the financial interests of shareholders.”
What is most disturbing about ESG, Barr told the author, is the way it’s being implemented. “It’s completely non-transparent,” he explained. “And that, to me—that’s the worst. That is affecting a lot of decisions in corporate America in a non-transparent way, because of the political predilections, or the policy predilections, of a small group of people who are not using their own money, but leveraging off other people’s money.”
The timetable of the emergence of ESG via Ms. Subramanya:
- Tabloid journalist Clements-Hunt came up with the idea of incentivizing wide-ranging investments in climate change in 2001. Gradually, the acronym ESG evolved.
- In June 2004, the United Nations published a report called “Who Cares Wins” that introduced “ESG” to the world.
- After the 2008 financial crisis and after the US dropped out of the Paris Accord, corporations took over in a huge way.
- Capitalism was redefined in August 2019 at the Business Roundtable [tied to the WEF and other globalist organizations]. It was no longer to be “shareholder capitalism,” but rather “stakeholder capitalism” [promoted by Klaus Schwab]. They issued a statement signaling the shift. The statement endorsed diversity and inclusion and called for “embracing sustainable practices.”
- By 2021, asset managers around the globe had plowed $18.4 trillion into “ESG-related” investments. And by 2026, asset managers are expected to invest nearly $34 trillion in ESG funds globally.
As Paul Clements-Hunt told Subramanya, ESG is now “baked into the DNA” of the global financial services industry, and countless companies are scrambling to burnish their ESG scores.
Carson Block, the founder of San Francisco-based Muddy Waters Research, said: “ESG investing, from the fund managers to the management of the companies themselves, is almost entirely a giant grift.” All ESG does, Block said, is repackage existing funds. “ESG is just bullshit tweaks at the margins.”
Indeed, between 2019 and mid-2022, at least 65 funds were “repackaged” into ESG funds to draw more investors and charge higher fees.