A Global ESG System Is Almost Here. We Should Be Worried
By Jack McPherrin
Day two of the World Economic Forum’s (WEF) Annual Meeting in Davos, Switzerland started off on a concerning note.
Some of the chief architects of environmental, social, and governance (ESG) scores met during a session called “Global ESG for Global Resilience,” and have clearly decided to double down on their objective for a new global economic order that transcends national borders and replaces free-market capitalism.
Destroying free-market capitalism in favor of a new “stakeholder” model, in which global elites hold all the power, has been their objective for years. A single ESG system gets them much closer to this goal, and will be significantly more effective at eroding national sovereignty, circumventing democratic processes, coercing companies into compliance, and ultimately restricting individual choice.
Early in the session, Hong Kong Stock Exchange Chairman Laura Cha got right to the point. She revealed, “To make ESG disclosures meaningful, we need to have a harmonized standard… It would be very good in terms of the work that the ISSB (the International Sustainability Standards Board) is doing to bring about standardized global measures.”
The ISSB is a new standard-setting board developed for the sole purpose of institutionalizing this global framework.
ISSB Chairman Emmanuel Faber confirmed that these efforts have begun, “We just a week ago… convened the first ever working group of jurisdictions on sustainability standards alignment. There was China, Japan, [the] UK, [the] US, and [the] EU. And that is just the start.”
He continued, “We can’t stay at the taxonomy levels of any jurisdiction. Because, they are linked to a certain political consensus and they might be changing tomorrow. So, if you’re looking at the long-term, you have to go deeper than the taxonomies.”
Reading between the lines, Faber seems to be saying that he intends to institutionalize a top-down system that will infiltrate all national borders and be impervious to political decision-making, which would render the idea of democracy impotent.
Much of the remainder of the conversation was an illuminating look at the ways in which elites will threaten and coerce the world into compliance.
Bank of America Chairman and CEO Brian Moynihan did not waste any time, immediately threatening companies to get in line. When asked if he believed that the war in Ukraine and COVID-19 have set efforts to expand ESG back, he responded, “No… The reality is that operating companies have made commitments, along multiple dimensions…they can’t just say ‘Oh, it’s inconvenient now.’”
He added: “I don’t see how you can walk away from it, because your customers won’t let you, your employees won’t let you, and your shareholders shouldn’t let you. And, by the way, society won’t let you.”
Gee, Brian, it really doesn’t sound like these companies are doing this based upon free will.
Moynihan also committed to using the economic clout of his entire organization, including the funds of his individual account holders, saying, “200,000 people, a three trillion-dollar balance sheet, 60 billion in expenses; you start aiming that gun, and you take it across all these companies, it is huge… [the companies] that deliver on the metrics will get more capital, the ones that don’t will get less.” He even discussed his implementation of a training regimen for each of his lending officers, educating them on how to talk to their clients about the benefits of ESG-resilient companies.
Moynihan went on to discuss how Bank of America and other organizations will make purchasing decisions related to their supply chains that will be based on their net-zero commitments, all of which will trickle down to businesses and consumers.
He warned customers to get on board: “The message that we send [to our customers] is this: We’re going to stick with you, but you have to start to think about this… We’ve got to get the rest of the world ready to go… Don’t think about this is as someone else’s problem. This is going to be your problem.”
Brian, you are manufacturing the “problem,” just like you are manufacturing “consent.”
Unilever CEO Alan Jope echoed similar commitments to shutting off supply valves for the rest of the world in favor of his objectives, which, by the way, won’t help solve our current supply chain issues and the related inflationary crisis. He preached, “We’ve pledged to only do business with suppliers who are paying their people a living wage and are making net-zero commitments, so we can take our impact into the entire universe of people who work with our company.”
Then, in one of the most concerning statements of the morning, Jope declared that for this system to work, “It has to go from government and regulators, into the capitalist system, big companies, small and medium sized entities; but actually, the ultimate way of moving markets is when the consumer is voting with her wallet.”
First, the growing alliance between big government and big business—with a little help from the media—carries substantial fascist overtones.
Second, the consumer you reference does not have a free choice, Alan. What you hope to do is akin to taking a popular candidate off an electoral ballot—like they do in electoral autocracies such as Russia—and forcing people to choose between limited options that are unlikely to be their preference.
There is a reason a natural market exists for these goods; there is consumer demand, which is in turn fulfilled by producers. These people are trying to both fundamentally alter demand by changing consumer preferences, while fundamentally altering supply by destroying producers who don’t join their team.
Faber frames these efforts as “We are not saying what’s good or bad. We are just providing the information for people to make decisions.”
Simply put, that is a lie.
As has clearly been stated by members of this WEF panel, what these elites are actually doing is steering investment away from companies that do not align with their vision for the world, and severing relationships with companies—causing a trickle-down reduction in choice for the rest of the market—that do not get on board.
This is not about information; it is about control, and power.
Jack McPherrin is research editor at The Heartland Institute.