ESG And The Virtuous Veil Neoliberal Corporations Hide Behind
ESG And The Virtuous Veil Neoliberal Corporations Hide Behind
Multinational companies are keen to endorse virtuous and progressive ideas in order to sell more. Those businesses play on emotion to reassure the consumer about their intentions. They promote ethics and morality, sometimes more than their products or services, and market the spectacle of virtue to shape their reputation publicly.
They deploy strategies such as “green washing” to persuade the population that their objectives and policies are environmentally friendly, “purple washing” to convince the masses that they support the feminist cause, or “diversity washing”, advertising openly supposed performances related to multiculturalism, equity, and inclusion.
Some of the most immoral companies – engaging in child labor, social dumping, collective redundancy, workforce abuses, etc employ such strategies to appear righteous and signal to their (potential) customers that they share similar moral values. As an example, a famous footwear firm was quick to show solidarity with the Black Lives Matter movement while hiding appalling workers' conditions in its factories located in developing countries.
The reason behind such hypocrisy also lies in the ESG rating, a framework evaluating a company on its environmental, social, and governance practices to supposedly provide transparency to investors, customers, and the industry as a whole.
The environmental indicators under the ESG metrics include for water usage, waste production, resources management, and climate change strategy. The social indicators include equal employment opportunity (pluralism of age, race, gender, religion, and sexual orientation) and responsible supply chain partnerships to name a few. The governance indicators include risk management and corporate governance (how companies interact with the full range of external stakeholders) as an example.
Businesses that fail on the environmental side tend to go all out on the social, specifically on the diversity barometer. A good ESG score is key to finding investors and showing allegiance to the woke ideology has become a strategy to boost the overall rating.
Among those potential investors is Blackrock, the largest asset manager in the world, co-founded in 1988 by Larry Fink, a billionaire who happens to sit on the boards of the World Economic Forum.
An investment fund company, e.g. Blackrock, allows natural (individuals) and legal persons (legal entity) to deposit tradable financial assets which in turn will be jointly invested in various activities or businesses.
Thanks to Blackrock for instance, those natural and legal persons benefit from the pooling of capital with others i.e. even if depositing small amounts, they will be able to access opportunities of scale available only to substantial institutional investors.
Blackrock and similar financial services take their commissions on the assets under management and while investing capital, might even obtain shares in firms within diverse sectors. Frequently, investment fund companies end up being the majority shareholder in enterprises they invest in, gaining such financial power that it eventually confers them incredible political power and an immense influence on governmental decisions.
For instance, only three investment groups – Vanguard, State Street Corporation, and Blackrock – constitute collectively the largest shareholder (90%) of S&P 500 firms i.e. the 500 leading publicly traded businesses in the U.S. such as Apple, Amazon, Facebook, Visa, Pfizer…
As a result, some of those firms, thanks to the investment and their colossal financial assets in stock market capitalization, have greater economic power than that of an entire country. Therefore, unsurprisingly, with such financial power, many presidents around the world welcome CEOs as if they were heads of state (e.g. Steve Jobs with President Barack Obama in 2011, Jeff Bezos with Indian Prime Minister Narendra Modi in 2018) and invite them to express their opinions on legislative bills.
When in 2010 in the U.S., the Supreme Court enabled corporations to spend unlimited funds on political campaigns (Citizens United v. Federal Election Commission), it aggravated the incursion of “private” into public affairs, and the influence of conglomerates on executive decisions.
The weakening of the nation-states has paved the way for the multinationals to take over. Progressively, an increasing number of companies are replacing essential governmental functions: justice, social protection, security, etc. Blackrock, for instance, has unlocked funds during the COVID crisis to support over-indebted businesses and communities.
Accordingly, we are slowly sliding into a new form of global regime run by firms and corporations, a corporatocracy. With the fast development of artificial intelligence, the Fourth Industrial Revolution advocated by Klaus Schwab, and the World Economic Forum, technologies offer unparalleled tools and opportunities to control the population. As an example, Blackrock has invested millions in the facial recognition system from a controversial company in China accused of unethical practices.
Furthermore, with a foot in so many businesses, BlackRock is able to access a wide range of information such as bank transactions, pension funds, and social network trends. Combined with our personal and public data, those are digested by their portfolio management software Aladdin which constantly analyzes the market and predicts its course.
And so, with such financial and technological power, it's no wonder that Larry Fink can demand, in a letter written each year to CEOs on behalf of BlackRock’s clients, that corporations must contribute to society in the private or public sector i.e. embrace the ESG rating.
Those refusing to play along might jeopardize potential investment opportunities. Consequently, the ESG score, supposedly a tool to encourage virtuous behavior, is de facto a social credit assigned to firms, the hijacking of capital until the submission to the Davos agenda.
And that is why multinational companies jumped on the chance to boost their ESG rating on every occasion (e.g. Pride Month, Black History Month) by engaging in costly woke marketing campaigns. Although some of those campaigns sometimes backfire, such as the partnership between Bud Light and trans activist Dylan Mulvaney that resulted in about $395 million in lost sales in the U.S. for AB InBev, they also guarantee businesses growth by investment and access loans.
Besides, a good ESG rating allows for instance polluting industries to appear environmentally friendly (green washing). Ironically, companies such as Tesla, an electric car producer, thus supposedly clean energy, score below some oil firms, failing on the social and governance indicators due to Elon Musk's anti-woke diatribe. There is no sin that the financial elite will not forgive as long as you comply with the “right” ideology.
The economic and political power of corporations such as BlackRock over nation-states keeps progressing. In 2020, the European Commission appointed Larry Fink’s company ESG advisor with the aim to work on new environmental rules for banks. In addition, recently BlackRock was also accused of repurchasing houses, competing with individuals, with the consequence of making the dream of owning a property unattainable for many families and forcing them into the rental market for life. However, BlackRock denied those allegations.
Thanks to the ESG rating, the domination of neoliberal capitalist corporations hides behind virtuous marketing campaigns. While our societies are becoming more and more socially (i.e. economically) unequal, the financial elite is pressing more and more on the promotion of the spectacle of societal egalitarianism.
 | A guest post by
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The safest bet in the world is that those who demand others do “virtuous actions” for some grand design, NEVER do those same actions themselves. See socialists and politicians. ESG is just a corporate Marxist shell game to avoid scrutiny and engage in meaningless pandering to the strident crew of “do and know nothings.”
In top US universities, the young students clamor to get into 'consulting.' Many top students are well entrenched in neo-Marxist and post-Modernist principles from high school. Their goal is to bring this ideology into corporations. The corporations like the PR spin which allows them to do as they wish behind the curtain. What we end up with is another weapon to dissociate ourselves from one another and to associate ourselves with corporations under the banner of virtuous goals.
In an interview with Lex Fridman, economist Steve Keen said that the people of China enjoy a pretty good life, but they know there are certain things they cannot say. It is the same with Singapore where you cannot speak about the king. I thought of this and the current state of affairs in the US. We silence ourselves because we fear the loss of a job, friendship, and possible criminal prosecution. So we are no different.
On a final note, I am wondering if instead of a corporatocracy, we should form a derivative of the word cartel. The thought came from reading Jekyll Island's author reference to the Federal Reserve's formation as a cartel. Surely Bezos, Zuckerberg, etc. are talking to each other. Perhaps we have it wrong that they take marching orders from the government. It is the inverse.