In 2019 the Business Roundtable, an association of large companies’ CEOs, abandoned its longstanding dedication to the idea that the “purpose of a corporation” is to maximize shareholder value. They decided that businesses should follow a “multistakeholder” model. That would be the World Economic Forum’s stakeholder capitalism at work. They thought that abandoning long-term profit maximization for ESG would create “an economy that serves all Americans.”
They left their mission for a leftist, pie-in-the-sky model.
It doesn’t work out very well!
“ESG investing and the management practices it promotes, however, usually increase production costs and constrain capacity. If a company diverts resources into a formal diversity, equity, and inclusion program, with all it’s attending human-resource hires and bureaucracy, it will have fewer resources available to conduct product research and development. Similarly, if a company whose core competence is oil and gas production chooses to move into wind and solar despite having limited expertise in these modes, its output will suffer. In general, an investment framework that de-emphasizes production in favor of social objectives will divert money away from efficient producers—in the same way, taxes will,” the Wall Street Journal reports.
ESG is run by very few elites, and their goals aren’t everyone’s goals. Yet, these elites then have the power to pick winners and losers in business according to an ideology.
That isn’t what America was founded upon and made us great.
The WSJ continues:
“Milton Friedman showed that raising the money supply’s growth rate increases the rate of inflation. But it’s also true that slowing the growth of overall output can increase inflation. If we think of the economy as one giant market in which we trade dollars for anything that dollars can buy, reducing the supply of available goods increases the price level, all else being equal. If enough companies focus on ESG priorities, then, they risk higher inflation and slower growth or stagflation.
“That isn’t to say that the general principles ESG emphasizes are undesirable, but that it’s more important to do good than to be labeled good. A company can be profitable with a diverse workforce without having a formal DEI policy. And such a company will ultimately serve a diverse group of Americans better by providing them more goods at lower cost.”
How about the elites stop robbing businesses of their freedoms?
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The Importance of Prayer: How a Christian Gold Company Stands Out by Defending Americans’ Retirement
Any video that starts out with “Klaus Schwab is a liar” deserves to be tweeted. 😂
It also points out that ESG is about as scientific as the Miss Congeniality award of a beauty pageant and that the great reset is a disaster for the plebs. pic.twitter.com/QeU5TJoChY
— The Researcher (@listen_2learn) April 2, 2023
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