In some ways, it appears that corporate wokeness has peaked. With conservative-led public pressure mounting and a tightening economy raising the costs of virtue signaling, companies are seemingly backing away from their environmental, social and corporate governance (ESG) commitments. But conservatives can’t afford to get complacent; progressive values are now deeply entrenched in corporate America. The left won’t just give up without a fight.
First, the good news. S&P Global, the international debt rating agency, has dropped ESG scores from the calculation it uses to assess companies’ debt risk, the Financial Times reported. The agency began including ESG scores — which launder left-wing identity politics and climate goals into corporate bureaucracies under the guise of financial sustainability — in 2021. In truly dystopian fashion, a poor score from S&P on something like insufficiently radical diversity training could make it more expensive for a company to borrow money. This incentivized conformity to left-wing ideology and punished companies who resisted. (RELATED: Just 3 Companies Are Leading The Charge In The Marxist Takeover Of America)
Now, the agency has announced it will replace the numerical ESG scores with “analytical narrative paragraphs,” which are a lot easier for investors to ignore. As one business professor told FT, the move was “just the latest example of a company crumpling in the face of these Republican attacks.” With backlash mounting against woke companies like Bud Light and red states investigations into S&P’s practices re-shaping the narrative around ESG, conservatives deserve to take a victory lap. Grassroots pressure combined with bold leadership certainly made a difference here.
It’s telling that Janet Yellen is pushing for the US to adopt CBDCs, begging Americans to keep up with the Jinpings. No. CBDCs are just the latest trojan horse of the Great Reset and are a clear path to a social credit system that will permanently embed ESG into our currency… pic.twitter.com/ZyMglMKe3O
— Vivek Ramaswamy (@VivekGRamaswamy) August 8, 2023
But conservatives should not confuse winning the battle with winning the war. Shortly after the announcement, Axios declared that “Corporate America is rebranding ESG.” With “165 pieces of anti-ESG legislation” introduced in Republican states, talk of ESG in corporate earnings calls has declined 64 percent since its peak at the end of 2021. But that doesn’t mean they’ve changed their minds. It just means big businesses are now being “more judicious” about how they proceed, Axios reported.
For the left, judicious just means sneaky. Companies know they can no longer overtly brag about their ESG scores without facing a backlash. Nobody wants to be the next Bud Light. For non-consumer facing companies, Republican states can investigate the practices, greatly increasing the cost of doing business. But at the same time, companies can’t just abandon the theory behind ESG — it is still the guiding elite ideology of those with institutional power in Washington, on Wall Street and throughout corporate America.
As a policy paper from the Committee for Economic Development notes, “[m]ost companies are pursuing ESG because their various stakeholders want them to — not because of politics.” In this new world, “CEOs” are more interested in their “responsibility to society,” while the “generational change” in employees has led to pressure from below. Additionally, “business value” is increasingly tied to “brand value” — an implicit admission that brand virtue signalling is about shoring up the bottom line.
It’s hard to believe that corporate leaders really care about their social “responsibility.” Rather, ESG works as a sort of protection racket from the federal government and dominant institutional investors like BlackRock and Vanguard. The Biden administration has worked to aggressively foist ESG on companies through the Securities and Exchange Commission while vetoing Republican attempts to minimize its stranglehold over the private sector. Meanwhile, the big investment firms have shares in nearly all companies in the S&P 500, which they can use to pressure CEOs. Those who resist open themselves up to legal challenges for hurting shareholder interests, potentially risking their own careers or big money bonuses.
BlackRock | Discover Aladdin, the BlackRock’s Asset Buying A.I. That Owns the World | FACT: “88% of the Companies On the S&P 500, the Largest Shareholder Is Either State Street, BlackRock or Vanguard.”- Patrick Bet-David On Joe Rogan#BlackRock#ArtificialIntelligence#Aladdin… pic.twitter.com/YLBQBgOdfc
— Clay “ReAwakening America” Clark (@TheClayClark) August 6, 2023
At the same time, many in the younger generations — which now make up much of rank and file workers — are true believers in ESG. As the policy paper notes, younger workers are “less likely to get married early, participate in organized religion, or become active in social/rotary clubs.” Thus, they find meaning in a new type of religion. Since work is their “principal connection to society,” they then push their employers to conform to their perception of “doing good in the world.” While this is a sad account of the younger generations, it means that wokeness is deeply entrenched in the collective pysche of corporate America. (RELATED: Highly Scored Green Companies Pollute Just As Much As Those With Lower Ratings: REPORT)
Given pressure from within and without, corporate wokeness will not be rooted out so easily. Instead, the messaging around ESG is about to get a whole lot more ambiguous and difficult to fight.
Expect more talk about “sustainable investing” and fighting the “climate crisis.” Green New Deal policies will be justified under maximizing shareholder value and meeting regulatory burdens. Corporate diversity officers might be getting laid off, but companies are still gearing up to defend their affirmative action hiring decisions in light of the recent Supreme Court blow to racialized college admissions.
Conservatives must be proactive as the left once again shifts the narrative on ESG. If the reaction is too slow, conservatives will lose the momentum of recent months as the left further institutionalizes its ideology. Don’t be fooled by the activist in sheep’s clothing.